actuary india march 2011

8/3/2019 Actuary India March 2011

http://slidepdf.com/reader/full/actuary-india-march-2011 1/32



Indian Actuarial Profession Serving the Cause of Public Interest

The Actuary India March 2011

√ FROM THE CHIEF EDITOR 4

NICK TAKET SHARES A FEW THOUGHTS ON

COMMUNICATION

√ INDIAN ACTUARIAL PROFESSION - DOWN 5

THE MEMORY LANE: INAUGURAL ADDRESS

BY N RANGACHARY AT THE 13TH GLOBAL

CONFERENCE OF ACTUARIES

√ FROM THE PRESS

IAA – IAA RESPONDS TO THE IASB 10

EXPOSURE DRAFT ON INSURANCE CONTRACTS

IAA – EDUCATIONAL MONOGRAPH: 11

DETERMINATION OF DISCOUNT RATES

FOR FINANCIAL REPORTING PURPOSES

√ RECOGNITION : SANJEEB KUMAR 11

√ IFA EVENT AT 13TH GCA BY RONNIE BOWIE 12

√ A TRIBUTE TO PETER AKERS 14

√ REPORTAGE : 13TH GLOBAL CONFERENCE OF ACTUARIES 16

BY MEENAKSHI MALHOTRA

√ MEDIA COVERAGE OF 13TH GCA 26

√ PUZZLE CORNER 30

Editor

Taket, Nic k

Tel: +91/22/6740-3333

Email: [email protected]

Manager (Library and Publishi ng)

Rautela, Binit a

Tel: +91 22 6784 3325


News Editor

Sharma, Sunil


Puzzle Editor Mainekar, Shilpa


COUNTRY REPORTERS

Smith, John Laurence

New ZealandEmail: [email protected]

Burra, Pravin

African Continent


Kakar, Gautam

European Union (EU)


Chung, Phuong Ba

Taiwan, Hong Kong & Japan


Ali, Syed Asad

USA


Cheema, Nauman

Pakistan


Leung , Andrew

Thailand


Disclaimer

Responsibility for authenticity of the contents or opinionsexpressed in any material published in this Magazineis solely of its author and the Institute of Actuaries of India, any of its editors, the staff working on it or "the Actuary India" is in no way holds responsibility therefor. In respect of the advertisements, the advertisersare solely responsible for contents and legality of such

advertisements and implications of the same.

The tariff rates for advertisement in the Actuary India areas under:

Back Page colour Rs. 35,000/-

Full Page b/w Rs. 20,000/-

Full page colour Rs. 30,000/-

Half Page b/w Rs. 15,000/-

Half Page colour Rs. 20,000/-

Your reply along with the details/art work of advertisementshould be sent to [email protected]

Printed and Published monthly by Gururaj Nayak,Administrative Officer, Institute of Actuaries of india at

Alco Corporation, A-1 / 16, Ground Floor, Shah - Nahar Indust.Estate, Lower Parel (W) Mumbai - 400 013 for

Institute of Actuaries of india

302, Indian Globe Chambers, 142, Fort Street, Off D N Road,Near CST (VT) station, Mumbai 400 001.

Tel +91 22 6784 3325 / 6784 3333

Fax +91 22 6784 3330

Email : [email protected]

Webside : www.actuariesindia.org

For circulation to members, connected individuals andorganizations only.

ENQUIRIES ABOUT PUBLICATION OFARTICLES OR NEWS

Please address all your enquiries withregard to the magazine by e-mail at

[email protected]. Kindly do notsend it to editor or

any other functionaries.

FOR THE INFORMATION OF READERS

Authorship of the article titled “How Actuarial- ActuarialInspiration: William Shakespeare” in the November 2010issue of the Actuary India magazine, had been erroneouslyattributed to Ms. Megha Mehtab Puri. It was essentially a reprintof an article written by Dan Skwire for the American Academy of Actuaries’ Contingencies publication in 2007.

CONTENTS





(Introduced to the audience by Peter

Akers, Chairperson 13th GCA Organising

Group)

Thank you Peter for that introduction.

You have made my life miserable withthat introduction. Mr. Khan, Mr. Akers, Mr.Cecil Bykerk President of the International Actuarial Association, and leaders of theactuarial professions across the globe,

and friends….I admit it is a great privilegeto have been granted by theInstitute of Actuaries of India tobe present amongst you today aspart of the 13th Global ActuarialConference, which the instituteis holding at Mumbai. About sixor seven weeks ago Mr. Khanhad come home to invite me tobe present to inaugurate thisconference. I had expressed my

own fears and doubts whether hewas choosing the right man for the job. My concern was centered on twothings; number one, I left the Regulator’soffice eight years ago, and since then havebeen very determinedly keeping myself out of any issues concerning insurance,secondly whether a contemporary personwould not have been a better choice for inaugurating a professional conference.

However, two things gave me the courage

to appear before you today. The first onewas the great honour that Mr. Khan haddone me when he was the President of ASI, to have conferred on me an honoraryfellowship of this institute, which I admit itto be a great honour to be a part of thisprofession. At that time I had made amention that in my early days I wanted tobe an actuary. But somehow or the other

I got into the profession of accounting

and became the member of the three

accounting bodies that we have today in

this country. I thanked him then for that

honour and I still thank you Mr. Khan for

having conferred that great honour on

me. The second thing which compelled

me to be present today with you here, is

the last time that I met you actuaries at a

conference was 2003 and it was also the

year I left the Regulator’s office…when

you had a different constitution, when you

were still a society and now that you have

become a constitutional body, you are on

par with the other chartered institutes which

govern the professions of accounting, cost

accounting and company secretaries in

this country. And this being the first of such

occasions where I have been presented

to be amongst you as chartered members

of this profession of actuarial science, I

thought that I should show my face and be

part of your festivities.

I would like to mention how this global

conference got started. In 1996, Mr. K

Subrahmanyam and I, were sent out

on a global mission by the Government

of India. One of the stops that we had

was in Ottawa, where we were invited toattend the Canadian Actuarial Profession’sConference. Believe me, that conference

INAUGURAL ADDRESS

INDIAN ACTUARIAL PROFESSION - DOWN THE MEMORY LANE

must have been attended by a minimum of about 2000 persons drawn from differentfaculties and that gave Subrahmanyamand me an idea that we should also try tosponsor that kind of a conference in India,though not of that magnitude. We shouldtry to introduce to the Indian market, thevalues and the profession of actuarialscience to the industry as well as to themembers of the public. And in 1999 when

we finalized the regulations in the authority’soffice, we mooted this subjectwith the ASI (the predecessor of the Institute) and with Mr. Khan.We were a little skeptical aboutthe reception that it will receive inthe hands of the Indian ActuarialProfession. What people outsideIndia will think about a nascentprofession where the number of actuaries currently in employment

or in practice could be countedon one’s finger tips; whereapparently there was no scope for actuarialwork? Somehow or the other we had to goahead with this. ASI was not in that affluentsituation as it is today. So we roped inFICCI (Federation of Indian Chambersof Commerce and Industry) through thekind courtesy of a friend of mine, who wasthen advisor to FICCI, Mr. Murari. FICCIsaw the advantage in co-hosting this. Andthat is how the first of these conferenceswas held in Delhi in 1999, with IRDA, ASIand FICCI, sponsoring the event. Theresponse was very encouraging and thisevent has now become an annual event. And I am glad to notice that the attendanceof these conferences has been increasingyear after year.

In the initial years at least up to 2003,when I was there, you could find a lot of

Inaugural address by N Rangachary at the 13

TH

Global Conference of Actuaries





people, grey haired with a lot of portfoliosbeing carried, coming and attending theseconferences with lines of worry on their faces, not very sure about the openingof the insurance industry in India…whatthe colour and character of that industryis going to be and all the time in a veryexpectant mood that something will happenin this country after all. That sort of a fear or should I say confusion is now totallyreplaced. I find amongst you today qualifiedyoung professionals who have a cheerfuldisposition and who have a spring in their walk and who are determined to be greatcontributors to the professional life of anactuary. In fact I must say it openly that

the profession of an actuary today in Indiais a well sought after profession. This isan area where the people would like toqualify themselves. As the opportunitiesavailable to them are many we find anumber of people joining this course andtrying to better themselves and to better theinsurance industry. This is a very significantand a great development in the professionof actuarial science in this country.

I was mentioning about the conversion of the ASI into the Institute of Actuaries of India. I was mentioning it to Mr. LiyaquatKhan before we moved in here, that one of my last jobs with IRDA prior to I left, was toappear before the parliamentary committeeto support the Bill to convert the societyinto a chartered body. And many in thesociety did not feel very happy about theconversion. I was perhaps the only fellowwho thought that a society as such may

not command that much of an acceptancewith the government as a chartered bodywill be. I always felt that openness anda transparency in a professional body’sdealings was always welcome. The other three chartered institutes that we have inthis country do have public participation;they have nominees on their Councils,drawn from different sectors not necessarilyfrom the government itself. And they have

been in a position to charter their path ina much better professional manner, thanwhat they would have been if they were tofunction as societies.

Well ladies and gentlemen these were mythoughts which compelled me to come tothis function today, and as I said earlier Iam very privileged to be here. I had noteddown some points which I thought I willshare them with you. By tradition, a typicalkey note address amongst professionals,on an occasion like this will survey thecurrent professional landscape andidentify the next steps to make the Indian Actuarial Profession more successful and

acceptable. In keeping with this tradition,I would like to do a SWOT analysis onthe Indian Actuarial Profession and thenpresent my views on how to carry theprofession forward.

A good starting point for the SWOT analysiscan be to look at some statistics. I will take2000 as the year of the start because thatis when the Indian insurance industry gotbroadened and the independent operatorswere admitted into the fold. If I were to

take a ten years’ perspective I find that theprofession has grown phenomenally fromabout 750 members including studentmembers to the present 12,000 or so.The primary driver of this growth has beenmainly due to the increasing number of students who have joined the professionwho have grown as I understand from about600 to 11,400 today. It is a very good signthat the profession is being sought after, theprofession is being populated by youthful

members, who would be in a position tocarry this profession to greater and greater heights in their times to come. If we lookat the manifold increase of the number of students over the period, I think the growthin the Indian Actuarial Profession has beena great success story.

Having said that I would also like to caution,that the very success could pose a risk and

we must not be complacent about the needto maintain the luster of the profession.Dealing with the strengths I would like tomention initially the phenomenall growthof the industry both in the life and thenon- life sectors. In the first decade of this century, a large numbers of insurershad set up business in this country. Thisnumber is likely to increase if the proposedequity structure of an insurance companyundergoes a change in the near future.The large number of operators in theindustry and the phenomenal growth thatwe have seen both in the life and the non-life sectors in the last 10 years makes oneto believe that this is a growth area, and

considering the fact that the insurancedensity in this country is still not matchingwith the levels which have been reachedeven in the Asian region. The prospects of the growth in the industry and the playerscontinues to be bright and if that were thesituation at the industry level, then as thegreat participants in this growth and thosewho sustain this growth by their expertactions, the actuarial students as well asthe actuaries do have a very bright future.

As always the particular expertise oactuaries lies in evaluating long termfinancial liabilities. Clearly the complexnature of the liabilities demands a highlevel of technical inputs and much of thesehave been the exclusive preserve of theactuarial profession, partly because of theregulatory requirements of the protectionthat the regulations offer to the appointedactuaries. However, we need to remember that the demand for actuarial services willalso depend upon the availability of thecomplex long term financial liabilities. Itis possible that financial companies andother financial intermediaries can stopcreating obligations that cannot be readilyhedged. However, I would think thatsuch a scenario is improbable becauseconsumers are likely to always demandsome form of a guarantee to be embedded





in the long term financial contracts. Let usmove over to the next one, “Weaknessesand threats”.

It is probably difficult to talk about the

weaknesses without talking about thethreats. Hence I would like to addressboth, weaknesses and threats in the samebreath. I see three emerging trends or risks for the profession. The first of theseis the commoditization, the second ispotential laws of influence and the thirdis the understanding gap. What I meanby commoditization is the increasinguniformity with which we are doing our calculations and not adequately using

our unique skills of picking the rightassumptions. The best example to illustratethis point will be to consider the employeebenefits area where actuaries are requiredto value liabilities using assumptions asspecified by the employer and a discountrate which is clearly prescriptive. While Ido concede that the commoditization is toa large extent is driven by regulators andaccounting standards, the point is how dowe address this issue. We‘ll see about it a

little later.The next risk which I would like to highlightis the potential loss of influence both, with the regulators and the clients,including the employers. The questionsare: are we doing enough to stake thetrust of our regulatory stakeholders bydemonstrating that we are driven by astrong force of public interest? Have wedone surveys amongst the employersand other clients in our traditional and

non-traditional areas to understand their requirements and perceptions? Are our technical skills and knowledge continuingto remain unchallenged? Are the employerscomfortable with our business awarenessand the communication skills?

This brings me to a discussion about thethird risk, the Understanding Gap. TheMorris Review in the UK commented

on the understanding gap which existsbetween the users of actuarial servicesand the actuaries, and suggested that thiscan result in an insufficient challenge toactuarial advice. Let me assure you thatthis is not a phenomenon which is facingthe actuarial profession alone. Today if yousee around yourselves there seems to bea very distinct disconnect between marketanticipation and professional service in allrecognized professions whether it be theaccounting profession, lawyers, doctors,engineers and others. The public seemsto think justifiably that once an expert haslooked into a question that the answer delivered is the final one and the correct

one. But the situation exists today where thefaith in the professional bodies has startedto weaken because of various actionstaken by let us say the government, thegovernment departments. They questionthe certification of accounts or activitiesby professionals. I would not like to further elaborate on this. I think that this is asignificant issue for the profession whichdeserves a very serious consideration.

The Morris review had recommended atwo pronged solution to this problem. Thefirst recommendation was to impart better training and guidance for users of actuarialservices. The second recommendation wasthat the Actuarial reports to be preparedin line with a Communication Standard tobe developed by the Board of ActuarialStandards. While I do agree that additionaltraining for users and standardizationof reports can help, I am not completelypersuaded that these actions alone will

have the sufficient impact to close theunderstanding gap.

The Actuaries also have a role to play inthe process. I often hear the Actuariesbeing criticized as poor communicators.But I would think that it is not an entirely justified remark. The simple reason is theissues on which the Actuaries are trying tocommunicate do not lend themselves to

be reduced to a simple communication. Acentral part of communication by Actuarieslies in explaining the uncertainty inherentin their assumptions and calculations.Communicating uncertainty will complicatethe message and the users need to beaware of this. However, Actuaries canand need to put more part of imaginationinto the way they can communicatetheir findings. Graphics, heat maps andwater fall charts are some such tools for facilitating communication with a non-technical audience. I also think that asa first step, the Actuaries can attempt tobridge this understanding gap with theauditors so that they together will be in

a position to enable the Boards and thetrustees of organizations to assimilateeasily the results of actuarial analyses.

Turning to opportunities, the theme of this conference most aptly describesthe opportunities set for the Actuaries“Emerging risks… daring solutions”.While I am one with you while you chose thisvery appropriate title for this conference,I feel that risks are bound to emerge asthey are an inherent and integrated part of our life and it’s our duty to find solutions tothem. It is part of our daily life. But my onlyconcern when I saw this was, whether youshould call those solutions as daring. Myperception of a solution would be that it willbe an appropriate solution and it will be along sustaining one. Some daring thoughtsmight derail us somewhere. So let usconcentrate on finding solutions which aretransparent, acceptable to the professionas well as to the users of the profession

and will stand the test of time.

The role of Actuaries in risk managementis one of the most talked about topics ininternational actuarial circles. And a lotof effort has been devoted to positioningactuaries as the natural choice for senior risk management roles in the financialservices industry. It is heartening to notethat a number of overseas actuarial





bodies have started providing trainingfor actuaries aspiring to work in the areaof Enterprise Risk Management [ERM].These bodies have introduced ERM asan optional examination at the fellowshipstage culminating into a certified riskqualification. I am also glad to note thatthe Indian actuarial profession has startedputting more action behind this initiative.

To my mind actuaries have many of thetools needed for the quantitative aspectsof risk management. They, however, needto gain a better understanding of thestrategic and operational risks and howto implement risk management practices

and processes in an enterprise. It is alsointeresting to note that the regulators arebeing at the forefront driving the ERMinitiative by insisting upon companyspecific risk based capital calculationsalong side the existing solvency reportingrequirements. For example, the threepillared Solvency II framework is aimedat enabling insurance companies to findout where the risks lie, how to measurethese risks and to find ways and meansof managing or reducing these risks. Iunderstand that the IRDA has also beenactively promoting the economic capitalframework amongst insurance companiesby including economic capital calculationsas a part of reporting requirements.

Let me now turn to another opportunityfor the Actuaries. In the earlier partof my statement I referred to the riskof commoditization in the context of valuation of liabilities. I also see thatas an opportunity for Actuaries to focusmore on the asset side where the actionis .For those Actuaries, particularly thepension actuaries, who are prepared tobuild investment skills, there is a hugeopportunity to advise on the overall assetstrategy for insurance companies, pensionfunds, and employers sponsoring long termemployee benefit plans. Actuaries are in aunique position to advise on liability driven

investment strategies provided they canmake that mental leap to become “asset-liability management” actuaries rather than remaining as “liability” actuaries.

The Morris review had recommendeda transition from the current practice of providing guidance notes to a Principles’based approach for settling actuarialstandards. As and when this transitionhappens and the technical guidancebecomes more principle based then therole of actuaries in terms of their ability toexercise actuarial judgment will becomeimportant and will ensure a continuingdemand for their services.

Having covered the threats andopportunities facing the Indian actuarialposition let me briefly dwell on the wayforward. I believe that among other things,the Indian actuarial profession must focuson the following aspects as part of thegrowth strategy in the future - Research anddevelopment, attracting talent, education,continuing professional development andengaging with stakeholders

If Actuaries have to be successful in the faceof greater competition, then the professionneeds to work harder to have the best toolsfor their job. This will mean more researchand the profession has to consider howthis will be funded and researched. TheProfession needs to identify issues of contemporary concern both in the Indianand global contexts and commissionsuitable research projects – particularly theones which promote application of actuarialtools and techniques in “Wider Fields”.

I would also strongly encourage the Indian Actuarial Profession to remain as a strongand active participant in the internationalactuarial research initiatives so that we canbenefit considerably from the sharing of ideas and research with our counterparts. An example can be our active involvementin developing a principles – based approachto setting actuarial standards.

On the question of attracting talent asurvey commissioned by the UK ActuarialProfession in 2008 revealed that lessthan 2% of the brightest and the bestmathematics students and graduatesconsidered an actuarial career. While Iam given to understand that the Indian Actuarial profession has been attractingsome of the best minds from the IIT’s andthe IIM’s to join the profession as students,it is important to have an appropriatestrategy in place to continue to attract our share of the brightest and the best. Theattraction of an actuarial career to themathematically minded graduates can bepartly offset by the long travelling time it

takes to qualify as a fellow actuary. This iswhere we need to think about packagingand promoting the Associateshipqualification as an appropriate base for acareer in various branches of finance andfinancial services.

The other key challenge in this contextwill be to ensure availability of appropriatecareer opportunities for the actuarialstudents both in India and abroad. Thiswould call for some serious thinking onthe part of the profession to make theskill sets of the students compatible worththe current and future requirements,particularly in a global context. In my visionI look for the day when the Indian actuarialstudents are sought after for internationalroles by the foreign partners of the Indianinsurance companies.

Turning to education, with regard to theeducation process, I would like to make two

small suggestions related to the structureand means of delivery. Under the currentstructure, the students are required totake a mix of core and non-core actuarialpapers as part of the core technical level. Itis probably worthwhile to examine whether some of the subjects like statistics,economics and finance can be examinedas part of the entry requirements into theprofession so that the remaining core





actuarial papers can be beefed -up withmore technical and application orientedcontent.

My second suggestion relates to the mode

of delivery. I think we should make moreuse of university based education andfocus on broadening the range of actuarialscience offerings in reputed educationalinstitutions. I believe that there aresignificant benefits to be gained fromteaching the core technical and applicationsubjects at the reputed universities andother specialized academic institutions.While the probable reduction in theaverage qualification time can be a benefit

,the other main benefit is likely to be abetter understanding of the key conceptsresulting from face to face teaching anduse of a wide range of pedagogic toolssuch as computer based modeling. Alsothe mathematical content of the currentsyllabus is a more demanding andstudents will probably need more help tounderstand. Of course the profession hasto ensure that the standards are consistentacross all these routes to qualification.

On continuing professional devel opment,I would like to say that the importance of CPD has never been greater for practicingactuaries than now. Given the currentenvironment, it is too obvious that actuarieswho do not keep up to date are likely to findthemselves to be obsolete quite quickly.The profession has to continually reviewthe minimum verifiable CPD requirementsfor its members and probably raise thebar on the minimum level of the CPD from

time to time. The profession must alsoexperiment with new ways of delivering theCPD content in order to ensure maximumparticipation- webinar being one suchmeans of delivery. Besides the CPD typesof programmes, the profession must alsoseriously consider offering intensive shortterm courses which are needed for today’sactuaries to renew and update their coreskills.

On the question of engaging withstakeholders in the earlier part of my

presentation I mentioned the need for building and sustaining constructivepartnerships with the regulatory

stakeholders and employers. I would like toadd the third stakeholder here- the members

of the profession. While in comparison withthe others, this engagement seems easy,

but it is not so in practice. It is vital for everyprofession to maintain a constant dialoguewith its members and equally important

to assess frequently whether we succeedin this mission. A useful starting point in

this direction can be for the profession todevelop and articulate its vision, mission

and values of the profession which willprovide the framework within which theconstructive dialogue with its members

can take place.

In this address I have tried to cover a number of themes which can be of relevance to the

Indian profession with varying degree of depth. I am convinced that the current users

of the actuarial services-the regulators, theinsurance companies and pension funds

trustees- have a high degree of confidencein the Indian actuarial profession and viewthe members of the profession as highly

competent. I am also convinced that thedemand for actuarial services is strong

in the traditional domains and is likely toremain so in the near future.

I am also equally convinced that there are

financial intermediaries and non- financialentities outside the insurance and pensionsector that need help from those who truly

understand risks. They are not aware of actuaries as a potential source of help. I

would like the Indian actuarial professionto take advantage of this opportunityand broaden the cause of serving public

interest.

While I was forming my thoughts on this,I suddenly thought of something which

is happening in the Indian accounting

profession. Before I conclude I must giveexpression to a thought that crossesmy mind - the adoption of internationalaccounting and reporting standards.While such a move may be a welcomeone in the background of globalizationof enterprises, it needs to be examinedwhether a wholesale transformationfrom the existing system to the new onewithout noticing the local trends can bevery useful. Development of markets isnot uniform over the world. Practicesfollowed by the profession also do notnormally get standardized in differentparts of the world. Such features deserveto be recognized.

I see this global conference as an importantstep in the direction of globalizing the Indianactuarial profession and raising the level of awareness of this profession in the Indianfinancial sector. I find this conferencecharacterized by a large participationfrom the international fraternity - a galaxyof eminent speakers and presenters andpanelists drawn from within and outsidethe country. An array of actuarial topics

of contemporary importance has beenlisted for the next two days for discussion.I am sure that interactions, deliberations,and presentations that will follow duringthese two days will strengthen the Indianprofession and give a professionallyenriching experience to all of us.

Well, ladies and gentlemen, I wish theIndian Actuarial Profession great strengthsand success in the years to come, theannual conferences to be populated by

more and more professionals coming fromwithin the country and also from outsideIndia. I feel greatly enthralled and blessedto inaugurate this 13th Global Conferenceof Actuaries.

Thank you, ladies and gentlemen.

THANK YOU





IAA February 10, 2011

The International Actuarial Association

(IAA) continues to support the International

Accounting Standards Board’s (IASB)

financial reporting project to revise its

International Financial Reporting Standard

(IFRS) 4, Insurance Contracts. The

IAA believes that a high quality global

standard on the accounting for insurancecontracts will be of benefit to both insurers

and the users of their published financial

statements.

The IAA provided a comment letter on

November 30 in response to the IASB’s

2010 exposure draft on this project. In that

letter, the IAA pointed out that, although

the proposal included in the exposure

draft is moving in the right direction,

enhancements to several aspects of it are

desirable, namely:

• including incorporation of a clearer

and more consistent objective for

risk adjustments incorporating

diversification effects across portfolios;

• acquisition costs that relate to acquiring

a portfolio rather than incremental to a

contract;

• subsequent measurement of the

residual margin;

• an economic approach to unbundling;

• a transition to the revised standard

that treats currently in-force and new

business in a consistent manner where

practical.

In addition, the IAA indicated that it is in

the process of developing implementation

guidance to actuaries regarding the new

standard, including a compilation of

relevant techniques in developing discount

rates and current estimates.

The IAA has been represented at the

November meeting of the IASB’s Insurance

FROM THE PRESS

IAA RESPONDS TO THE IASB EXPOSURE DRAFT

ON INSURANCE CONTRACTSWorking Group and at one of the FASB/

IASB Roundtables held in December. It

will also be represented at the Working

Group meeting to be held in March. The

IAA continues to provide advice on this

project, both to the IASB and to practicing

actuaries, having prepared a research

paper on risk margins and current

estimates in 2009.

During the course of the development of its

comments regarding the IASB’s Exposure

Draft, the IAA’s Committee on Insurance

Accounting has also worked with the IAA’s

Member Associations, twelve of which

also provided comments to the IASB, all

of which are posted on the IASB’s website

(iasb.org) under its Insurance Contracts

project.

To learn more about the work of the IAAon this topic, contact the IAA Secretariat

care of the Chairperson of the Insurance

Accounting Committee.

FROM THE PRESS

SUBSCRIPTION NOTICE

A. The annual subscription falls due on 1st April every year. The annual Subscription for the year

2011-12 falls due on 1st April 2011. The current Subscription rates are as under:

Class of Membership Fee for Resident in India andmembers from SAARC countries

(INR ` )

Fee for resident in rest ofthe world (US $ )

Fellows/Affiliates 2,000 140

Associates 1,000 100

Students 500 70





IAA February 17, 2011

The IAA is pleased to announce the

successful completion of a Request

for Proposal to author an international

educational monograph on the topic of

issues associated with the determination

of discount rates for financial reporting

purposes, scheduled for completion in

September 2011.Determination of Discount Rates is clearly

a key topic today and will continue to be

well into the future. The use of discount

rates applies to most actuarial calculations,

including regulatory reporting, international

financial reporting, economic capital

development, principles-based approaches

to reserve and capital determination, fair

value reporting for assets and liabilities,

and enterprise risk management.

The educational monograph will address

concepts and practical methods that

are being used in the application of the

discounting process for the purpose of

financial reporting, capital assessment

and internal management reporting of

(1) insurance companies and (2) pension

and employee benefits obligations on

the sponsor entity. It will also provide a

number of case studies based on real

life examples as performed globally by

actuaries, insurance companies, and

pension plan sponsors.

This monograph forms an important partof the IAA’s research and educational

objectives, to facilitate and provide useful

educational material that is accessible to

actuaries everywhere.

The project has been awarded to the firm

of Milliman, Inc., an independent actuarial

and consulting firm founded in 1947.

This project has been made possible

through the generous support of the

following actuarial organizations:• The Actuarial Foundation (United

States)

• Canadian Institute of Actuaries

(Canada)

EDUCATIONAL MONOGRAPH: DETERMINATION OF

DISCOUNT RATES FOR FINANCIAL REPORTING PURPOSES• Casualty Actuarial Society (United

States)

• Financial Reporting Section of the

Society of Actuaries (United States)

• Institute of Actuaries of Australia

(Australia)

• Institute and Faculty of Actuaries

(United Kingdom)

In addition to their financial support,

these organizations have appointed

representatives who will provide technical

guidance and ongoing monitoring of the

project as members of the ad hoc Project

Oversight Group (APOG) created to

oversee the project. Other members include

the leadership of the IAA Committees on

Enterprise and Financial Risk, Insurance

Accounting and Pensions and EmployeeBenefits.

To learn more about the work of the IAA on

this topic, contact the IAA Secretariat, care

of the Chairperson of the APOG.

FROM THE PRESS

the Actuary India is pleased to know that the paper titled “TraditionalVs Market Consistent Product pricing” submitted by Sanjeeb Kumarduring 11th GCA has been selected by Society Of Actuaries, USA fortheir study material for the candidates taking the ILA exam.

[email protected]





Ronnie Bowie, President, and Nigel Masters,Immediate Past President were delightedto welcome 250 + members of the Instituteand Faculty of Actuaries to an Open Forumin Mumbai on Monday 21st February 2011.The Forum was held during the 13th GlobalConference of Actuaries and was attendedby many distinguished guests including Mr.Liyaquat Khan, President of the IAI, Mr. CecilBykerk, President of the IAA and several other office bearers from actuarial associationsround the world.

Mr. Bowie opened the meeting by stressing theimportance to the Institute and Faculty (IFA)of its Indian members who represent a major constituency within the overall total. The Councilof the IFA is debating its future strategy butMr. Bowie assured the audience that the newstrategy would stress the IFA`s commitment toits members outside the UK, providing themwith excellent education and member support

throughout their careers. He also madeclear the IFA`s wish towork in collaborativepartnership with the IAIso that both could playtheir part in supportingactuaries in Indiaand developing theprofession`s influenceand strength.

Mr. Bowie then

presented diplomas to 5 new Fellows andrecognised the achievement of Mr. Varun Guptawho had become one of the first membersto qualify for theChartered EnterpriseRisk Actuary (CERA)qualification. Mr. Bowiepresented Mr. Guptawith a small mementoof the achievement.

Mr. Masters then

gave a presentationon 21st centuryprofessionalism. Heemphasised that highstandards of ethics werepart of the actuary`s professional backboneand, in their own way, were as important ashigh technical standards. The Actuaries Codewas a simple yet powerful code to guide us inour professional lives. The IFA and the IAI were

committed to promotingthe highest standardsof ethical behaviour

and were workingclosely on the formatof professionalismcourses both for newlyqualified and moreexperienced actuaries.The InternationalCommittee of theIFA`s professionalismCommittee wasalso focusing on the

IFA EVENT

IFA EVENT AT 13TH GCAparticular regulatory and professionalismissues faced by IFA members outside the UK.

The IFA needed feedback from its memberson what they needed and on how the existingsupport met those needs. He invited membersof the audience to volunteer to be part of various focus groups to help this effort. Severalmembers indicated that they would be willingto volunteer.

Mr. Masters gave some practical examples of the challenges faced by individual actuariesand by the profession but reaffirmed the IFA`scommitment to help its members meet thosechallenges.

The meeting closed with a shortreception during which members hadthe opportunity to meet Mr. Masters andMr. Bowie and to discuss with them a widerange of issues.

Mr. Bowie and Mr. Masters wish to record their thanks to the IAI and to its President Mr. Khanfor the opportunity to hold this Forum during

the GCA and for their hospitality and continuedcollaboration.

Ronnie Bowie

President

Institute and Faculty of ActuariesThe Actuarial Profession, [email protected]

Ronnie Bowie

Nigel Masters

Varun Gupta receiving memento from Ronni e Bowie for qualifying CERA



4



A TRIBUTE TO PETER AKERSBy Liyaquat Khan

Hi Peter,

Difficult to believe that in the next some days you will be off from India to your home inGreat Britain. My memory goes back, more than 10 years back when for the first time,on the sites of the “Global Conference of Actuaries”, probably it was the year 1999-2000,I saw a paper distributed by you titled something like ‘Sinister Risks.’……I was impressed.That went into my mind. We didn’t know each other then.

In 2001 when you came to India to work, one of the first few things that you did was tocall me and introduce yourself. I was President of the Actuarial Society of India as theinstitute was called then. We met over dinner. Jainekar was with us. We discussed thevisions and values of the professions that I was trying to build up. You instantaneouslyadded you could contribute and were keen to do so to any extent that I felt was necessary.

You became part of the Indian Actuarial Profession.I would like to recall quite a few things that you did. One was what is now called MMIC- Mortality and Morbidity Investigation Centre. We had initial difficulties, in fact hugedifficulties, conflict of interest between the profession and the Life Insurance Council. Inthe back ground, the job you did as a diplomat … yes almost as a diplomat to havethis settled, that enabled a few years down the line, the centre to be set up within theframework of the “Institute of Actuaries of India”.

Other thing that occurs to me immediately is your contribution to “the Actuaries India”magazine as an editor. And of course how can I forget…when I was elected on 4th September as President of the Institute of Actuaries of India, just in two days time, you called me andsaid you wanted to meet. I said I’ll come down to meet you but you insisted that youwanted to come and meet me. Well, I did suspect something of the slip that you had. Wemet and you offered to take partnership of what we now call “13th Global Conference ofthe Actuaries”. I then requested you to take over the leadership of organizing the wholeconference of actuaries, which you agreed to willingly.

It has been a grand event Peter; Indian Actuaries Profession cannot forget your contribution.Though you will be going back to your home we expect you to be associated with usthrough the Actuary India magazine…. Writing your memories and obviously about the“13th Global Conference of Actuaries” that to a large extent has fulfilled my vision and thevalues around it, executed very ably under your leadership.

I personally in the Indian Actuarial Profession wish you good luck in future, in whatever

you want to do and also wish you a very peaceful and happy life.

“Farewell! A word that must be, and hath been - A sound which makes us linger; - yet -farewell!” (Lord Byron)

Thank you very much.





Peter Akers recently retired as the Chief Executive Officer of Munich Re India Services after being with the Company for nearly 4 years. He has been in the Insurance industry for over 35years, starting his Actuarial career with the National Provident Institution (now part of AMP). Hefurther went on to work with Canada Life and Abbey National and thereafter with KPMG as aPartner in their London offices.

He moved to India in 2001 to set up the insurance joint venture of Birla Sun Life and servedas their CFO and Appointed Actuary. He was the Chief Operating Officer and part of the senior management team of Birla Sun Life before moving to another Sun Life venture in China for ashort stint.

He returned to India in 2007 to head Munich Re India Services, part of the leading Reinsurancegroup.

Peter is a graduate with major in Mathematics/ Statistics and a Fellow of the Institute ofActuaries, UK and the Institute of Actuaries of India. He has been a member of the IAI Group

on Life Insurance and the IAI Group on Communications. He also functioned as Chairman of Advisory group on Professional Affairs and Standards 2009.

He was appointed as the Chairman of the Working Group on Pensions and Annuities set up bythe IRDA in 2010 and also the Chairman of the Organizing Group for the IAI’s Global Conferenceof Actuaries 2011.

Peter Akers association with the Actuary India magazine:

Following are the articles contributed by Peter Akers

Article title Month & Year

Appointed Actuary Dec-2002

Imminent Annuity Crisis Oct-2002

Reflections on the first three years in India Apr-2004

He was Country Reporter for China (Mainland)

Month & Year

October to December 2005

January to December 2006



January 2009

He also worked as Chief Editor for the magazine.

Month & Year

February to December 2009


Peter’s passion includes football and following the fortunes of his favorite team – Manchester

United.

Peter Akers - An Incredible Journey



6



The 13th Global Conference of Actuaries was held from 20th Febto 22nd Feb 2011 in Mumbai and was organized by the Instituteof Actuaries of India (IAI) in conjunction with the International Actuarial Association (IAA) and Health section of IAA (IAAHS).The conference was a unique endeavor that recognized the roleof Actuaries in various fields. The overwhelming response thatwas received from the participants was commendable to be longcherished. More than 700 participants from all across the worldattended the conference.

This time the conference continued for three days instead of two.

The speakers and the chairpersons from some twenty countrieswere invited for the global pool of leaders who shared their ideas onvaried subjects. Out of 68 speakers, 45 were from other than India.

Liyaquat Khan giving best theme award to K Ganesan

The theme of Conference “Emerging Risks…… DaringSolutions” was an award winning entry of K Ganesan of LICof India. The key themes covered at GCA include EnterpriseRisk Management, Insurance Regulations, Solvency, Insuranceaccounting, Reinsurance solutions, Micro insurance and Takaful.

There were 12 Sessions which were conducted on 21st and 22nd February. The Papers/Presentations can be downloaded from

Institute of Actuaries of India’s website. A brief description ispresented herewith:

Day1:

Session 1:

Inaugural Session

In the inaugural session, Mr. Peter Akers, Chairperson, 13thGCA Organising Group, welcomed presenters and participantsand mentioned that this was the first time other Actuarial bodies

By Meenakshi Malhotra

[email protected]

REPORTAGE

13TH GLOBAL CONFERENCE OF ACTUARIES – A REPORTAGE

organized the events within GCA. He also congratulated 28 newfellows.

Peter Akers giving welcome speech

In the opening speech Mr. Liyaquat Khan -President IAI talkedabout toughness of actuarial examinations needed to be qualifiedto become Actuary and role of Actuary in the areas such as finance,social sector planning, investment, government health planning.

N Rangachary giving key note address

The conference was inaugurated by former and the first Chairmanof IRDA, Mr. N. Rangachary who also delivered Key Note address.

He urged the enthusiasts in Indian Actuarial profession to takeadvantage of the growing opportunities in the risk managementfield He mentioned that actuaries are the natural choice for theEnterprise Risk Management (ERM) and institute should introduceERM as one of the specialization subject in Actuarial examination.He also talked about the whole journey of Actuarial Society of Indiato Institute of Actuaries of India, right from the submission of Bill.

Mr. Heerak Basu concluded the inaugural session by vote of thanks, after addresses by Cecil Bykerk President International Actuarial Association and Rudolf Lenhard of Munich Re.





Heerak Basu giving vote of thanks

Session 2:

Global Round table

Ashvin Parekh chaired Global Round Table

The second session of the forenoon, chaired by Mr Ashvin

Parekh, Partner and National Leader, Global Financial Services,Ernst and Young, was a Grand Round Table discussion of 14eminent speakers consisting mainly of Chairpersons and CEOsof insurers, re-insurers and actuarial bodies. The topic of eachspeaker was contemporary and captivating.

For an apt beginning, there was a discussion on the theme of 13th GCA viz., “Emerging risks …. Daring Solutions” by Mr G NBajpai, Ex-Chair, SEBI. He classified risks into three categories – structural risk, systemic risk and operational risk. While thefirst two are at a macro level being affected by the industry, theeconomy, the social and political environment etc., the third

one is specific to the company. The company should be ableto perceive the implications of the fusion of different risks andtheir consequent effects. The company should also identifypotential areas of operational risk which may manifest intosystemic risks, for instance, if there is heavy dependence ona particular distribution channel, then it is pertinent to note theconsequences on the company of the failure of that channel.Finally, he emphasized that the company should not lose trackof the macro level risks and should consciously assess andmitigate them.

Mr Brad Smith, Chairman, Milliman, spoke on counterparty risksand the challenges that they present. Various factors such asmarket movements, interest rates, inflation rates, stock marketvolatility and performance of other sectors (other than the financialsector) affect the counterparty risk. Re-insurers have a significant

counterparty risk on their balance sheets.

Mr Rudolf Lenhard, Chief Executive, Munich Re Intnl Life-Re,discussed the model risks and the problems due to insufficiencyof data. He preferred to discuss a slightly modified GCA theme –“Known risks – emerging Causes”. The known risk in life insurance,as we all very well know, is due to the long term nature of theproducts and the guarantees envisaged. This feature is uniqueto life insurance and will remain so although there is a significantshift towards Unit linked products wherein the investment riskgets shifted to the policyholders. There may be higher solvencyrequirements if there is significant guarantee. The guarantee may

also bite if the market enters a falling interest regime. Long termguarantees rely heavily on reliable statistical data. Re-insurersmay be able to provide credible data covering the industry if thecompany has a backing of a re-insurer.

Mr Bhargav Dasgupta, CEO, ICICI Lombard spoke on the effectof climate changes on crop insurance. He stated that manya time, it is difficult to predict a catastrophe, for example, the Australian floods, the Japanese earthquakes or the IndonesianTsumani. Past data can never be used an indicator to the future,unlike in case of mortality. The penetration of crop insurance isonly about 25% in the Indian Market. Also, there is no standard

norm to decide the adequacy of catastrophe insurance.Mr Gautam Bhardwaj, IIEF discussed the linkages betweeninsurance and pension reforms. He had set up the first committeeon pension reforms. He emphasized the need of mitigatinglongevity risks and the need to address the serious problemsof old age and poverty. He said that over 90% of the Indianpopulation do not have access to pension and rely on their lifetime savings during old age. Most countries are moving towardsnation wide pension reforms. He further mentioned that since thelong dated assets are not available, the matching of liabilitiesbecomes very difficult. He said that there is a turn over of assetsby approximately 5 times during the tenure of an annuity, due tothe long period involved in its servicing. The pricing of annuity isstill a big challenge in the market.

Mr Esko Kivisaari, Vice Chair, IAA, Pension and EmployeeBenefits Committee, also discussed challenges posed by annuityportfolio and touched upon the investment and inflation risksinvolved. He pointed out that sufficient population studies have tobe carried out to arrive at reliable conclusions.

Mr Ralph Blanchard III President, CAS, USA deliberated on theconcentrations of exposure of risk, followed by discussion of



8



Mr Ronnie Bowie, President, IFA on social unrest. Mr CecilBykerk, President, IAA, deliberated on the theme of GCA andalso discussed several risks faced by insurers. Mr Mark Saundersreflected on the reputation risk. He insisted on the need toaddress issues relating to consumers, investors and innovations.

The need to build up the trust of the investment committee neednot be emphasized more.

The Round Table ended with a thanks note by the Chairperson,Mr Ashvin Parekh.

Session 3:

Financial Markets: Managing Risk

Cecil Bykerk chaired the session on Financial Markets: Managing Risk

The session was chaired by Mr Cecil Bykerk – IAA President

The first speaker was Mr Brad Smith, President Elect Society of Actuaries, USA. He spoke about the US Economic Crisis and itsimpact on Global Insurance Markets.

He informed that the focus on reserves has been misguided. Veryfew companies in the past have gone insolvent because of lower reserves. Large or premature payment of dividend is also not thesignificant cause of insolvency.

After the crisis in 2008, there was a meeting of National Associationof Insurance Commissioners of US. In the meeting he made atestimony that in the good times when everything is fine, reservingis fine but over reserving endangers the industry. During bad

times though the companies are economically solvent but becomeinsolvent on market value basis. He sited two main reasons for the crisis- Freezing Asset classes and the tendency of the Banksto put money in highly populist assets in pursuit of high yields. After his testimony two out of seven standards were liberalized insome states and in some other states two more standards wereliberalized. After the crisis was over the Insurance Commissionersappreciated the insight provided to tide over the bad phase.

He informed that too much capital requirement reduces the safetynet and access to the capital market. It increases the base thereby

decreasing the return on capital. He stressed that the mispriced,unprofitable products were the main reason for insolvency. Hegave examples of the dominant products in the US market whichmisestimated policyholder behaviour and assumed lapsation of 3% to 8% during later durations whereas the actual lapsation

turned out to be less than 0.5% thereby putting the companiesin deep trouble. These products had low premiums and nocash values. He informed that in some products like long termcare companies lost 8% of capital for every 1% extra assumedlapsation.

Mr Gary Comerford who is the Global Chief Marketing officer of RGA Re spoke about Corporate Governance issues in the newcontext.

He said that there is increasing complexity of Financial servicesaround the world. 34 years ago simple Canadian model of four

pillars was used. Banks knew what exactly to do. Today four pillars are gone. Liquidity, risk management, investments allaspects have melted together and clear delineation is not there.

With the Globalisation of Markets there has been a evolution of Corporate Governance. Earlier there were no compliance officers.Misselling and other things were not serious enough. Now thereare Corporate Governance Guidelines, rules where stipulationsare more stringent creating lot of tension. Moreover there is aconstant pressure to achieve revenue targets. We lose sightof the important question as to whether more revenue createsmore value. He gave example of Pension Company which wasoperating in middle class segment. Because of Guarantees itwent into huge troubles and was fined heavily.

He suggested that we should not lose sight of the fact that we arein a noble industry providing protection. He asked the audienceto think like CEO or COO of the company and then see whether the actions give direction, create value and are compliant withthe regulations.

The last speaker on the topic was Mr Ramnath Balasubramaniam.He mentioned that in US the market is slowly recovering thoughprofit value creation is yet to reach the pre crisis level. Now Asiaplus Japan has become the Global Insurance Powerhouse. There

is heightened regulatory intervention. He further mentioned thatthe Return on Equity is under pressure and there is increasedrating agencies pressure on the companies.

Session 4:

Professionalism and Actuarial Education

This session was chaired by Ralph Blanchard III, President -Casualty Actuarial Society, USA. Ronnie Bowie while discussingon Professions in the Society and Actuarial Education covered





the new principles based actuaries’ code and the continuousprofessional development. He also spoke on the future prioritiesviz. role of senior actuary, management of negligence risk,issues relating to the whistle blowing, ethics, public confidenceand public interest. Jon Thorne then discussed on the need of

independent oversight of UKAP and how it works, the drivers of actuarial quality including the reliance and usefulness actuarialmethods, communication, technical skills of Actuaries and theworking environment. David Wilmot spoke on the issues relatingto educating actuaries and optimization of actuaries – by number or by quality?

Ralph Blanchard III chaired the session on Professionalism and Actuarial

Education

Session 5:

Insurance Regulations & Solvency

Peter Doyle chaired the session on Insurance Regulations & Solvency

Peter Doyle, President - Actuarial Society of South Africa chairedthis session which covered in details about the Solvency andRegulatory issues engaging the insurance industry across theglobe. Michel M. Dacorogna dwelt on the risk based marketconsistent solvency requirements with a specific focus on theprocess of implementation of Solvency II, the resulting EconomicBalance Sheet, the available capital and the Solvency Capitalrequirement. Esko Kivisaari spoke on the scope of International Accounting Standards (IAS) and the ongoing issues linked with

the International Financial Reporting System (IFRS).Pillar I of Solvency II deals with the risk quantification, use of standardand internal models for risk and capital management, Pillar IIsets out principles for internal control system and sound riskmanagement and the Supervisory Review and Evaluation

i.e. the Qualitative requirements. A brief on these viz. designconsiderations, construction of models, Own Risk and Solvency Assessment (ORSA) etc. was discussed by Toshihiro Kawano.He also discussed on the papers developed by IAA on Solvencyand related issues viz. ERM for capital and solvency purposes.

Session 6:

Takaful: Vision and Values

Emile Stipp chaired the session Takaful: Vision and Values

This session was chaired by Mr. Emile Stipp, Chairperson-Health

Section of International Actuarial Association.Mr Azim Mithani (CEO, Prudential BSN Takaful Berhad, Malaysia)gave the opening remarks on “Takaful: Vision & Values’, the Roadahead”. He mentioned that Middle East countries & South East Asian countries form the current market for Takaful Insurancewith Iran being the largest market. Although currently there is lowpenetration of Takaful Insurance but this market is growing rapidlyand there is huge potential for further growth. The Malaysianmarket for Takaful Insurance is expected to grow manifold over next decade. He spoke on the concept of Takaful Insurance, theoperation of various Takaful Models, the product portfolio, pricing

procedure & the challenges ahead.The second speaker, Mr. Debo Ajayi, (MD& Consulting Actuary,Milliman, Dubai), spoke on “Operational technical Issues in Takaful(Surplus Distribution, Solvency, Pricing, Deficit funding, ROC)”.Takaful Insurance does not allow transfer of risk. Profit objectiveis met from investment profits, expense margin and underwritingsurplus. Value for money is something that participants(policyholders) look for inspite of Takaful being Shariah compliant.Thus the takaful products are always compared with benchmarkconventional products.



0



The unique challenges faced are :-

• Solvency because the risk is borne by operator only,

• Shariah Board Audit,

• Creation of risk fund for lapsed policies• Investment (since only tangible assets are allowed) and

• Deficit funding.

• To have in-place a Shariah compliant reinsurancearrangement.

Session 7:

Round Table: Indian Insurers going public

Mr Ashvin Parekh initiated the discussion on the issue. He

mentioned that it has been ten years since the sector was liberalizedand there are now issues engaging our minds like increase in FDIin insurance sector from 26% to 49%. The quantity of paper thatwill be available in the market on Indian Insurers going publicwill be to the tune of Rs.60,000 crore. The big questions is , “ ismarket ready to absorb such a huge supply?”

Dr R. Kannan, Member IRDA, informed that the Regulator isinterested in ensuring that all the important facts and informationis available to the prospective investors in a timely and accuratemanner. Regulator will not be interested in determining whether a price X or Y is correct. It will be according to the market based

principles.He said that the insurance companies initially estimated that theywill start earning profits from 6 th year onwards, however, it did nothappen. During the first 3-4 years the business growth was muchmore than projected. Companies estimated that this high growthtrend will continue and large amount of money was invested ininfrastructure and human resources resulting into high set up costsand expense overruns. Then there was high churning of peoplefrom one company to the other thereby increasing the trainingcosts. All these factors delayed the achievement of breakevenpoint. Currently only 3-4 companies have reached the breakeven

stage and all other companies are yet to see the profit.In this backdrop when the companies go public they will beinterested in telling the public what risk management practices thatthe co follow. How their business is sustainable and profitable? Alot of disclosures with full transparency will be required to instillconfidence in the minds of prospective investors. Policyholderswill be interested in whether the company be able to meet itsliabilities post IPO. Since no company is going to lose AUM postIPO Policyholders would like to see the existing Guarantees plusreasonable increases in Bonuses.

Regulator will ensure that the company has followed all thenorms required to be fulfilled before going public. Estimation of Economic Capital and Embedded Value will pose challenges. A normal method of calculating Operational Risk will haveto be worked out. Role of Valuation Actuaries will be very

important. If the liabilities are underestimated or the assets areoverestimated then there are real chances of spurious surplusemerging in the valuation exercise. Regulator would like to seethat all the assumptions made in this respect are certified byan Independent Actuary. Detailed disclosures about capitalstructure, reinsurance arrangements, expense overruns will berequired.

Mr Yash J Ashar, a Capital Market Lawyer from Amar ChandMangal Das, mentioned that the Capital market is risky. Our Companies Act allows Board of Directors to use the servicesof experts. For example in a company operating in Oil and Gas

sector, experts will be able to estimate and inform the Board asto how much Oil is expected to be there below the soil. Similarlyin case of an insurance company role of this expert is played by Actuaries.

Actuaries will be required to estimate and explain the EmbeddedValue of a company and also the concerns as well as risks so thatthe investors are aware of the issues in the Industry. Indian issuesnow attract the overseas Institutional Investors too . Hence, thereare challenges like increase in the FDI limit. Without this thechances of IPO happening in the future are remote

He informed that there are issues like identification of promoters,interplay of regulators like SEBI and IRDA, Quarterly reportingrequirements, objects of the issue, Qualified Institutional Placement(QIP) requirement. Capital markets regulator discourages the useof projections whereas without projections Embedded Value andfuture NB forecasts will not be calculated. Companies would liketo use the IPO proceeds to expand whereas the regulator wouldlike them to use it for solvency purposes.

Dr. R. Kannan informed that there are three sub-committeesworking on IPO matters and one of the issues under considerationis the definition of promoters.

Day 2:

Session 8:

Insurance Supervision for Solvency

The insurance supervision for solvency session was chairedby Dr. R Kannan, Member Actuary, IRDA Mr. Ramon Calderon,Chairperson, IAIS, solvency and actuarial issues subcommittee,made a presentation on the IAIS perspective on solvencysupervision. He emphasized on how regulators can use solvency





II development in regulating the solvency of companies in their respective territories.

Ramon Calderon gave a presentation on the IAIS perspective on solvency supervision

Session 9:

Insurance Accounting

Nigel Masters chaired the session on Insurance Accounting

This session was chaired by Mr. Nigel Masters, immediate PastPresident of the IFA. Mr. Ralph Blanchard III, President CAS,USA shared the information on ongoing projects in non life areain IASB. Mr. Hans Van Der Veen, Financial Accounting AdvisoryServices - Ernst &Young, made presentation on the insurancecontract related work going on in IASB.

Third presentation in this session was made by Mr. SanketKawatkar, Head of Life Insurance, Milliman India on the IFRS 4Draft. He highlighted various issues that insurance companiesmay face in implementation of the IFRS 4.

Session 10:

Micro Insurance

The session was chaired by Mr. Ronnie Bowie, President – IFA.

Mr. Dirk Reinhard, Vice Chairman, Munich Re Foundationspoke about the Current trends and future opportunities inMicro Insurance. He said that it was a growing market with alot of untapped potential and that micro insurance was simply

not about reducing the premiums. They are complex productswhere underwriting is not easy. He also stated that since MicroInsurance profits take long to evolve it would be helpful to getsome to help with aspects like infrastructure etc.

Ronnie Bowie chaired the session on Micro Insurance

Government subsidy and NGO’s could help in selling the products.He mentioned that a lot of research is to be done with regards totype of products that can be sold and relating data needs to becollected.

Mr. Luis Huerta, CEO of Eka Seguros, Past president of IAA,spoke about the Micro Insurance market in Latin America. Heelaborated on the lifestyle, culture and the customer needs of theregion. He touched upon the products sold in this region.

Mr. Denis Garand, President – Denis Garand and Associatedspoke on the ten key performance indicators for Microinsurers.The ratios look at the growth rates, penetration, renewals,

expense ratios, claims and service quality. These should beanalysed within the country and also with other countries. Trendsshould be looked at and the indicators should be combined,linked and analysed.

The ratios such as Claims ratios are indicators of whether theproduct is viable for the insurance company and whether it isvalue for money for the customer.

He also stated that Micro Insurance could be viable by having aReinsurer, however first there is a need to manage the productwell and only then others will be willing to participate.

Mr. Frank Mclnerney, General Manager – Gen Re Singaporespoke on Micro insurance: the Actuarial Contribution. He said thatMicro Insurance should be seen as a commercial opportunity andnot as a Social program. Micro Finance companies give loans toindividuals and Micro Insurance is taken to repay the loans in caseof his death. The targets for Micro Insurance was the middle andlower income groups and the insurers should take necessary stepsto reduce Moral hazard. Including the spouses of the loanees woulddrastically increase the cost of insurance. Some of the basic risksof the product can be countered by having suicide clause.





Session 11:

Enterprise and Financial Risks

Brad Smith chaired the session Enterprise and Financial Risks

The session started with the speech of Mr. Brad Smith, President

Elect, who was the chairperson for this session. Mr. EskoKivisaari, delivered his speech on Enterprise Risk Managementon the topic of Pensions. He highlighted various risks a pensionfund faces. He also discussed how ERM helps a firm in managingthe long term capital..

Mr. James Creedon, Director Risk Consulting and Softwaredelivered a speech on Solvency II – Own Risk and Solvency Assessment (ORSA). He described how ORSA, which is a part of Solvency II regime helps a firm to manage Enterprise Risk. He alsodiscussed how ORSA is the core of any financial business and itforces the company to think about its business in a consolidated

risk management environment.

The third round was on the subject ‘importance of a robust ERM’.Mr. Martin Sarjeant, Head of Department of iWork Prophet,SunGard, spoke on importance of robust ERM framework. Hedescribed it as a very useful tool in reducing the complexityand manage risks through operational transformation. He alsohighlighted how a robust ERM system allows a firm to activelymanage, understand, control and mitigate the risks which in turngive increased security and return to policyholders. He also spokeabout various utilities of Actuarial Software.

The last presentation in this session was titled ‘Economic Capitaland Solvency II’. Mr. Pradip Tapadar, made a presentation on thissubject. He said that the concept of Economic Capital providesa consistent financial risk management approach which providesuniformity across the financial services industry.

He also described The Economic Capital as amount of capitalrequired to ensure that, over a specified time period, marketconsistent balance sheet of a firm remains solvent with a prescribedprobability. He also presented a case study that described therelationship between EC and outstanding term of policies. .

Session 12:

Concurrent Sessions:

C1: Health & Care Insurance

C1. 1: Health Insurance: Pricing & Wellness ProgrammesThe first part of the session was “Stochastic modeling concept &application for high deductible pricing” by Mr. Biresh Giri.

This part started with the general issues on the stochasticmodeling approach and considered separately for short term& long term contracts. Discussions were made to identify thevariables which are suitable to be modeled stochastically for both the types. The concerned areas of application may alsoprovide guidance towards this (eg. regulatory requirement,pricing level etc.).

Various available alternatives like stress / scenario testing, staticfactors (PAD, MAD etc.) were discussed with their advantages &disadvantages.

He mentioned that the main aspect in the modeling is the processof assigning an appropriate distribution to the parameters to bemodeled stochastically. It was agreed that although sometimesa good fit may be achieved for the past values, it still needsconsiderable considerations including the possible future trendsbefore applying it. It was also stated that in the circumstanceswhere a good fit of distribution can not be obtained, we mayconsider the empirical distribution with sufficient cautions.

The second part of the session “Health insurance & wellnessprogram” by Mr. Emile Stipp was started with the objective to findwhether there is any correlation that exists between the wellnessprograms & health insurance claims and if so to what extent.

For this purpose a case study of South Africa was presentedwhich offers considerable discounts in premium rates if somespecific measures towards the wellness program are adopted. Theresults were considered after eliminating the aberrations due toselection effects and the cost vs. benefit outputs were analyzed. Itwas revealed that in spite of the considerable costs involved, thebenefit level was substantially higher than it. Due to the additionalad advantages of social benefits and the above, it was concludedthat benefit is higher than cost if it is designed suitably.

C1. 2: Health Insurance: Governance, Product PerformanceMonitoring

The session was chaired by V. Subramaniam, Head—Underwritingand Reinsurance—SBI General Insurance Co.

Lawrence Tsui, Director and Senior Products Actuary—Life &Health in Asia—Pacific Region—Swiss Re, spoke on the topic





“Healthcare and the Governments in Asia”. He spoke about theimpact of government’s objective and action with regard to healthcare provisions in the country, subsidy provided for health careetc. on the health insurance industry and types of health insuranceproducts. His presentation was specific to Asian countries.

Samuel Tan, Senior Manager (Actuarial & Underwriting Services),Munich Health, Singapore, spoke on the topic “Health Insuranceproduct performance monitoring and rate reversion”. He spokeabout the purpose of portfolio monitoring, data requirement for various type of analysis and use of various analyses for redesigningof the product features and rewording the terms and conditions.

C 1.3: Round Table: Impact of Legislative & Regulatorychanges on Health Insurance

The session was chaired by Mr. Anuj Gulati, CEO Religare HealthInsurance. Dr Bhabatosh Mishra, VP underwriting and products,

Apollo Munich Health Insurance, spoke about important facetsof Health Care. He discussed the need for Health Regulator and the progress that was being made in this direction. He alsodiscussed about the impact of regulation and regulatory body onconsumers, costs, controls, quality etc. Mr. Sanjay Datta, HeadCustomer Services, ICICI Lombard (Health and Motors), spokeabout the need for structured data and problems in getting it andlearnings from abroad on how to store, code and transfer data.He discussed how health Insurance has evolved over a period inIndia. He also spoke about the need to bring down the loss ratio.Mr. Richard Kipp provided an International perspective to the topicof discussion. He discussed the impact of regulations on various

stakeholders. He spoke about the way health legislation is framedin U.S. and the role of working group of experts and involvementof Industry people in these groups. He also suggested that Indiacould pick up from the US experience to address the currentissues like portability, changes in pre-existing conditions etc andthe potential impact of these changes on health business..

In the end Mr. Anuj Gulati spoke about the aspects of collaborationof Insurance companies with the regulator and also collaborationamong the Insurers to tackle the key issues.

C2: Pension, Employee Benefits & SS

C2.1:This was a Round Table discussion chaired by Mr. GautamBhardwaj, MD-IIEF.

The discussion was initiated by the Chair with leading questionson the subject matter and elicited the opinion of the participants.

The question centered around mainly on the future role of actuaries in “Pension, Employee & Social Security in India’.

Following the establishment of PFRDA & introduction NPS(DC Scheme)

In integrating the various pension programs which are atpresent fragmented

Developing innovating pension products in a DC Set-up.

Mr. K. Subrahmanyam, Chairperson – Advisory Group on PEB

& SS, IAI, in his response, highlighted various benefits, projectsof the Government in India for the benefit of organised andunorganized sector, increasing financial burden due to unfundedapproach and emphasized on the urgent need of bringing allemployee retirement benefits under one umbrella.

Mr Merette, CEO Asia Pacific – Aon Hewitt, focused on the danger of the financial burden of social security leading to bankruptof several nations. He emphasized the need for simplicity indesigning the pension product especially when it is deliveredto weaker sections. He also underlined the importance of consistency, collaboration at policy levels and the need to avoidexcessive regulation.

Mr Kivisaari, Vice Chair – IAA Pension & Employee BenefitsCommittee, was of the opinion that the present problems of DBwas due to faulty product design and cautioned the professionnot to repeat the same in a DC Set-up. His opinion was thatactuaries have a critical role to play in ‘de-accumulation’ phaseand educating the consumer in taking right decision

C2.2

This session was chaired by Mr. A. D. Gupta, Vice President –Institute of Actuaries of India.

In this session, Mr. Gautam Bhardwaj, MD - IIEF, made a

presentation on the challenges of old age income security indeveloping countries.

Mr. A. Viswanathan, Central Provident Fund Commissioner (Retired) Advisor, gave a presentation of various statutory benefitsin South Asian Countries including India, which are available onlyto organized sector .

The presentation of Mr. Kulin Patel, Head Benefits - TowersWatson, provided an interesting insight into the trend of RetirementBenefits in Asia Pacific countries and preferences of employeesin choosing the benefits.

The survey results presented by him indicated ‘medical benefits’as the most preferred benefit choice followed by retirementbenefit regular income.

C2.3

The final session was chaired by Mr. J. S. Salunkhe, Senior Actuary and Advisor – Mercer India.

In this session, Mr. Edouard Merette, CEO Asia Pacific – AonHewitt, dealt on the evolution of Retirement Risks in the 21st Century. He identified the social risks that are likely to emerge





during the century and the need for developing a comprehensivesolution to have social harmony.

Dr Avinash Chander, Technical Director ICAI, while delivering hisspeech on ‘IFRS & Beyond’ explained the views of ICAI on

−Convergence (rather adoption) of IFRS from April, 2011

− The areas in which they disagree with IFRS.

He dealt in detail not only on the need for adoption for Indianindustry but also on the challenges likely to be faced by allprofessionals including actuaries.

Development of AS 19 (similar to IAS-19), treatment of actuarialgains and losses in ‘AOCL’ are some of the changes AccountingProfession is initiating for convergence in IFRS.

There was a lively discussion on the measuring interest rate

guarantee for accounting purpose (DB or DC). While participatingin the discussion, IAI President Mr. Liyaquat Khan, reminded themembers of the professional guidance issued by IAI which placesthe responsibility only on the sponsoring employer.

The session provided an opportunity for the participants to identifythe various issues relating to the employee and SS benefits, roleof actuaries in evolving solutions.

C3: Life Insurance

Life insurance section consisted of following three presentations:

● A round table chaired by Mr. Mark Saunders, Risk Consulting

Practice leader, Towers Watson and dealt “Indian LifeInsurance-Successes, failures and the way forward

● A session chaired by Dr. Avijit Chatterjee, Chief Actuary, ICICIPrudential Life insurance and dealt two subjects- the firstone being “International developments in risk management,product manufacturing and innovation” and “M&A What is theright price? Some food for thought”

● A session chaired by Mr. Richard Holloway for “The evolutionof life insurance products in India way forward”

The 60 minutes round table with experienced speakers from

Industry Mr. Sandeep Bakhshi, Mr. Andrew Cartwright, Mr. NigelMasters and Mr. Amitabh Chaudhary covered the subject withfollowing six key question raised by Mr. Mark to members:

● Biggest success and failure of life insurance industry of India

● Main issues related to customer management and services

● The role player matrix and responsibilities in insurancecompanies

● Disclosure of information- its relevance and importance

● Actions required to develop India as a global insurancemarket

● Advise to actuarial fraternity

Next one hour witnessed two most relevant issues of times

under presentation, which were broad and comprehensive. Mr.Gary Finkelstein presented “International Developments in riskManagement-Product Manufacturing and Innovation” and “Merger & Acquisition – what is the right price” by Mr. Mark Saunders.

The later part of the session was nourished by Dr. Kannancreating waves of introspection and insight. The context of the topic “the evolution of life insurance products in India wayforward” has been most relevant to the 13th GCA at times whenregulators’ judicious fingers are present on Unit linked productsin multiple times and many insurers struggling to keep a firm foot.The thought provoking question as “What can be the criteria for

judging a best governance award for the insurer?” taken all toagree the simplest and deepest answer as “ an insurer offeringbest return in the market on their products with all regulatorycompliance”. The challenging task of achieving best returns hasbeen encountered by the market volatility existed during the lastthree years which lead to investors experiencing disappointmentand dissatisfaction. The struggle by the investing public to identifya suitable product has been never ending.

Mr. R. Kannan, said that during post-ULIP era, statistics isconclusive that the traditional products have far less sold thanUL products, which means, investors may loose their confidence

in the insurance products as a short or long term viable optionfor reasonable returns. Major milestones of regulatory changesfrom Pre-ULIP to Post-ULIP and to Cap-on-Charges and finallyto Discontinuance of Policy need to be looked at by keeping thegrim situations of market and customers in view. The regulationshas created an environment which can regain the confidence of investors and best governance by the insurers which can take theinsurance market to healthy growth and long term sustainability.The concern by the insurers over 4.5% minimum guarantee for pension products has been encountered by a question as” if theguarantee is beyond a common man’s expectations, do we reallybuy such products with a feeling of adequacy or recommend

to our near or dear ones?”. It indeed gives an answer to theguarantee concerns.

He further stressed that the way ahead is survival of fittestwho need to excel on the following factors leading to goodgovernance:

Research & Development

Products matching customer’s demands

Value added services





Customer care & education

Transparency and disclosure which is adequate andcomprehensive

Understanding operational risk

Image building- external agency ratingSession C4: General Insurance

Session C4.1

The Concurrent session on general insurance was divided into 3parts. First was a round table talk on Global reserving practices.This session was Chaired by Mr. Vikas Newatia of Towers Watsonwith speakers including Mr. Charles Cicci the P&C Actuarial Leadof Deloitte Consulting, Chicago, Mr. Miranjit Mukherjee the CFO of Tata AIG General Insurance and Mr. Ron Kozlowski who leads All Asia General Insurance at Towers Watson. Both Ron and Charlesspoke about various reserving methodologies and briefly touchedon some related issues. Mr. Mukherjee explained the impact thatreserving would have on the financial statements of the company.

The second sub session was chaired by Mr. R R Belle, CEO -SBI General Insurance Co. Ltd and Mr. Ron Kozlowski andMr. Charles Cicci both spoke in the first session. Ron gave apresentation on the Commercial Lines pricing of small and LargeFire risks. He described various rating factors that are requiredfor pricing. Charles spoke about the current reserving practices inIndia and how they may be improved.

The last sub session was chaired by Mr Yogesh Lohia - ChairmanGIC. Mr. Klaus Peter Mangold the Chief Actuary, Allianz P&C,Germany spoke about aspects of P&C retail pricing. He discussedvarious steps involved in P&C pricing including the data aspects,various models and the possible conflicts that may arise.

The last speaker of this concurrent session was Joydeep Roy the CEO of L& T General Insurance who spoke about the benefitsand challenges of setting up a non-life company in India. His talkwas primarily based on his personal experience at L&T General.

Session 13

Insurance Markets Reinsurance Solutions

This was the last session of the 13thGCA chaired by ToshihiroKawano. The speakers spoke mainly about the emerging risks of the 21st century instead of conventional reinsurance solutions.

Gavin Maistry, Chief Pricing Actuary, Life Asia of Munich Remade presentation on “Longevity & the Implications for theInsurance Industry “. Mr Maistry spoke of the economic impactof underestimating longevity and the challenges we face in thefuture as a result of an aging population. An Interesting part of hispresentation was about a Geneticist who says that by 2049, likelyexpectancy of humans would be 500 years.

Toshihiro Kawano chaired the session on Insurance Markets Reinsurance

Solutions

The Next Speaker was Paul Murray Managing Director Life andHealth Asia, Swiss Re, made his presentation on the idea thatlongevity is not a risk to the Insurance/ Pension industry alone butis a risk to the whole of mankind and in the same league as riskslike Global warming.

Mr Andres Webersinke the Head of International Life/HealthResearch and Development at Gen Re talked on Evidence Basedunderwriting and his principal aim was to encourage actuariesto get involved in certain aspects of Underwriting especially inthe development of an Underwriting system. He mentioned howUnderwriting has now become a field where a lot of data miningand Analytics is required and suggested that actuaries are in thebest position to contribute in this space.

The last session was Dieter Kroll who is the General Manager

Hannover Life Re International. In his talk he spoke about themechanism of Pension Buy outs in the UK and how this can befacilitated by a third party like a Special Purpose Vehicle.

By Meenakshi Malhotra along with P.K.Arora, A.K.Srivastava, Manoj Kumar, K.Ganesan, Neeraj Gupta,N.Kalpana, S.Sarkar, Chitra.S, A.K.S.Kushwaha, SangitaPange, Alap Mehra & Vinodkumar K.

Meenakshi [email protected]





Sr.

NoDate Media Edition News Covered

Print Coverage

1 23-Feb-11 The Times Of India Bangalore Not keen on IPO now: ICICI Prudential Life Insurance Company

2 25-Feb-11 Business Standard All Editions L&T General Insurance plans new products

3 22-Feb-11 Business Standard All Editions IRDA wants life insurance to face 10% stake cap

4 22-Feb-11 The Economic Times All Editions IRDA to unveil New Norms on Unit - linked Pension Products

5 23-Feb-11 The Economic Times All Editions ICICI Prudential Life Insurance Company Not keen on IPO

6 23-Feb-11 Business Standard All Editions Live Longer, Pay more:

7 24-Feb-11 Business Standard All Editions Gross premium income of general insurers rises 38%

Online Coverage

1 22-Feb-11 IndiaBlooms.com Online 13th Global Conference of Actuaries held in Mumbai

2 23-Feb-11 MyInsuranceclub.com Online ICICI Prudential well capitalized, not keen on IPO

3 23-Feb-11 APNNews.com Online At the 13th GC A, organized by IAI

4 23-Feb-11 Times Of India Online Not keen on IPO now: ICICI Prudential Life Insurance Company

5 23-Feb-11 moneycontrol.com Online ICICI Prudential not keen on IPO now: CEO Bakhshi

6 23-Feb-11 Business Standard Online Not keen on IPO now: ICICI Pru

7 23-Feb-11 IndiaReport.com Online Not keen on IPO now: ICICI Pru8 23-Feb-11 Indiatimes.com Online Not keen on IPO now: ICICI Prudential

9 23-Feb-11 Topnews.in Online ICICI Pru not keen on IPO now

10 17-Feb-11 Press Trust of India Online 13th Global Actuaries' Summit Begins on Monday

11 17-Feb-11 IBNLIve.com Online 13th Global Actuaries' Summit Begins on Monday

12 17-Feb-11 IndiaReport.com Online 13th Global Actuaries' Summit begins on Monday

13 22-Feb-11 The Economic Times Online IRDA to unveil new norms on unit-linked pension products

14 22-Feb-11 Business Standard Online IRDA wants life insurers to face 10% stake sale cap

15 22-Feb-11 Business Standard Online More options in unit-linked pension plans coming soon

16 22-Feb-11 Afternoon Online Insurance M&A norms to be out in 2-3 months: IRDA

17 23-Feb-11 India Everyday Online Not keen on IPO now: ICICI Prudential

18 23-Feb-11 Breaking News India Online Not keen on IPO now: ICICI Prudential

19 23-Feb-11 SmartInvestors.in Online Not keen on IPO now: ICICI Pru

20 23-Feb-11 Worldnews Online Not keen on IPO now: ICICI Pru

21 23-Feb-11 IBN Live Online ICICI Prudential not keen on IPO now:

22 23-Feb-11 Financial Hub Online Not keen on IPO now: ICICI Pru

MEDIA COVERAGE

13TH GCA - MEDIA COVERAGE





23 23-Feb-11 C ongoo.com Online Not keen on IPO now: ICICI Prudential

24 23-Feb-11 Daily Headlines.com Online Not keen on IPO now: ICICI Prudential

25 21-Feb-11 BusinessStandard.com Online Insurance M&A norms to be out in 2-3 months: IRDA

26 21-Feb-11 MoneyC ontrol.com Online Insurance M&A norms to be out in 2-3 months: IRDA27 21-Feb-11 SmartInvestor.in Online Insurance M&A norms to be out in 2-3 months: IRDA

28 21-Feb-11 MoneyLife.in Online Insurance M&A norms to be out in 2-3 months: IRDA

29 21-Feb-11 YahooFinance.com Online Insurance M&A norms to be out in 2-3 months: IRDA

30 21-Feb-11 NewsOneIndia.com Online Insurance M&A norms to be out in 2-3 months: Kannan

31 21-Feb-11 DeccanHerald.com Online Insurance M&A norms to be out in 2-3 months: IRDA

32 22-Feb-11 OneIndia.com Online M&A guidelines for Insurance to be out in 2-3 months: IRDA

33 21-Feb-11 ArticleWN.com Online Insurance M&A norms to be out in 2-3 months: IRDA

34 21-Feb-11 IBNLive.com Online Insurance M&A norms to be out in 2-3 months: Kannan

35 21-Feb-11 IBNLive.com Online M&A guidelines for Insurance to be out in 2-3 months: IRDA

36 21-Feb-11 In.com / MyDigitalFC .com Online Insurance M&A norms to be out in 2-3 months: IRDA

37 21-Feb-11 IndiaInsurance.com Online Insurance M&A norms to be out in 2-3 months: IRDA

38 21-Feb-11 MyDigitalFc.com Online Insurance M&A norms to be out in 2-3 months: IRDA

39 21-Feb-11 BeverlyHillsInsurance.com Online Insurance M&A norms to be out in 2-3 months: IRDA

40 21-Feb-11 Forbes.com Online Insurance M&A norms to be out in 2-3 months: IRDA

41 21-Feb-11 IndianExpress.com Online Insurance M&A norms to be out soon

42 21-Feb-11 Headlinesfeed.com Online Insurance M&A norms to be out in 2-3 months: Kannan

43 21-Feb-11 WSJ.com Online Insurance M&A norms to be out in 2-3 months: Kannan

44 21-Feb-11 HTTweets.com Online Insurance M&A norms to be out in 2-3 months: IRDA

45 21-Feb-11 Twitter.com Online Insurance M&A norms to be out in 2-3 months: IRDA

46 18-Feb-11 FinancialHub.in Online Insurance M&A norms to be out in 2-3 months: IRDA

47 21-Feb-11 EconomicTimes.com Online Insurance M&A norms to be out in 2-3 months: IRDA

IRDA will come out with guidelines for IPOs for insurers in the next

15-20 days while

48 22-Feb-11 Financial Express.com OnlineNorms on mergers and acquisitions will be unveiled over next 2-3

months

49 21-Feb-11 YahooNews.com Online Insurance M&A norms to be out in 2-3 months: IRDA

50 21-Feb-11 C ooperativeInsurance.com Online Insurance M&A norms to be out in 2-3 months: IRDA

51 21-Feb-11 Zeebiz.com Online Insurance M&A norms to be out in 2-3 months: IRDA

52 22-Feb-11 MSN.com Online IPO, M&A norms soon, says IRDA

Electronic Coverage

1 24-Feb-11 NDTV India's Budget

2 23-Feb-11 TV9 Mumbai News





Shilpa Mainekar [email protected]

BIRTHDAY GREETINGS

QUOTABLE QUOTESQUOTABLE QUOTES

March 2011

Batliwala, Minoo R. Chadha, R. C. Chidambar, G.

Krishnan, S. Mehta, H. C. JOSHI S. F.

(Birthday greetings to fellow members who have attained 60 years of age)

Many Happy Returns of the Daythe Actuary India wishes many more years of healthy life to thefollowing fellow members whose Birthday fall in February 2011

I have become my own version of an optimist. If I can’t make it through one door, I’ll go through another door - or I’ll make a door.Something terrific will come no matter how dark the present.. - Rabindranath Tagore

PUZZLE CORNER

The Funny ActuaryThe Funny Actuary A man walks into the actuarial department of an insurance company and sees three actuarial students busily involved in the center of the room.

One is holding a long board upright; the second is steadying a chair on a desk upon which the third student is balanced. The third student has one

end of a tape measure and the first student has the other. The intruder asks, “What in the world are you doing?” The actuarial students answer,

“We’re trying to measure this board.” The intruder says, “Why not lay it down on the floor and measure it?” The students answer, “We alreadyknow how long it is, now we want to see how tall it is.”

Puzzle No 149:

A teacher wrote the number 139,257 on the blackboard and asked

the class to write the number in base 8. One student noticed that theanswer, 417,771 is three times the first number if both numbers areconsidered to be in base 10.

What are the lowest and highest numbers (in base 10) to have thisproperty?

Puzzle No 150:

Almost all whole numbers can be expressed as the sum of no more thaneight positive cubes. For example, the number 121 needs only six:

121 = 4^3 + 3^3 + 3^3 + 1^3 + 1^3 + 1^3

Remarkably, there are just two exceptions to this rule. The first is 23,which needs nine positive cubes ( 2^3 + 2^3 + 1^3 +1^3 + 1^3 + 1^3 +1^3 + 1^3 + 1^3) , and the second is 239, which also needs nine positive

cubes, but which can be solved in two different ways. What are they?Solutions to Puzzles:

Puzzle No 145:

There were 13 games where the player that threw first won the game.Therefore there were 25 – 13 = 12 games where the player that wentfirst ended up losing.

The order of the play for next game changes when a player that wentfirst loses the game. From the given information it follows that Alvinwould have thrown first had there been a 26th game.

Alvin must therefore have won the 25th game and the tournament.

Puzzle No 146:

For the price to be mathematically equitable, the students would eachpay $20 to Rendrag for a total of $40. Rendrag’s portion for this part of the trip is also $20.

Correct solutions were received from:

Puzzle No 145:

1. Mayur Godse 2. Divesh Garg

3. Saurabh Bharangi 4. S. Raghu

5. Gayatri Jayaraman

Puzzle No 146:

1. Ankit Gupta

2. Y. Bhanuprakash3. Gayatri Jayaraman



SCOR is the 5th largest reinsurer in the world, practicing a traditional and cautious business appro

combined with conservative financial management. SCOR’S business strategy is based on a tri

engine approach, its engines consisting of SCOR Global P&C, SCOR Global Life and SCOR Glo

Investments, as well as on strong sectorial and geographical diversification. SCOR provides its clie

with cutting-edge technical services throughout the world in order to meet their security expectatio

CHARTS ITS COURSE

Profit & Losses 2009 in € millions

Gross written premiums 6,379

Net earned premiums 5,763

Investment income (gross of expenses) 503

Operating income 372

Net income 370

SCOR ratings

AM Best: «A» - Stable outlook (10/09/10)

Fitch: «A» - Positive outlook (24/08/10)

Moody’s: «A2» - Positive outlook (07/10/10)

S&P: «A» - Positive outlook (01/10/10)

© G

e t t y I m a g e s

actuary india march 2011

Documents