Great things are happening in India's actuarial world, says Venkatachari Jagannathan.

Chennai: Tumultuous events have happened during the last five years at the 60-year-old Actuarial Society of India (ASI), the governing body of the Indian actuarial profession. Not surprisingly, the ASI has hit the news columns regularly - for some good and some not-so-good - reasons.

Today, the ASI is poised to become an institute under an Act of the Parliament. With all the hurdles removed, the Actuaries Bill 2005 is waiting to be introduced in parliament. For years, Indian actuaries flew overseas for jobs; now, the liberalisation of the Indian insurance industry has opened up new vistas for them, in terms of professional knowledge as well as personal earnings.

Says K S Gopalakrishnan, appointed actuary, Birla Sun Life Insurance, "Actuaries are now exposed to global reporting methods. Suddenly they have to deal with shareholders, market demands, overseas regulatory norms. These were not there earlier."

He says there is a greater focus on risk and its management. "With policies getting ripped open by the competition immediately after their launch, there is an added pressure on the actuaries to design a different product," he explains.

This has forced companies to look at innovative products. For instance, Birla Sun Life first launched traditional products on a unit-linked platform. Now, the Life Insurance Corporation of India (LIC), too, has launched Jeevan Saral - a traditional product on a unit-linked platform.

The financial benefits are no less dramatic. Those who made around Rs20,000 per month working for LIC are now raking in over Rs50 lakh per year in private companies.

There are around 203 fellows in the ASI, but only 137 live in India. An even smaller number will be in the productive age band of 25 to 60. But with 29 insurance companies (15 life and 14 non-life insurers) in action and others waiting in the wings, there is a great demand for actuaries.

The prospects for private practice too have grown. Apart from the usual gratuity valuations for corporates, government departments - both state and central - offer excellent business prospects for consultancy when they launch pension schemes for employees and other sections of the society (See:).

Is it any surprise, then, that student enrolment has increased at ASI. From 471 students enrolled in 2000, numbers have risen sharply to 3,615 in May 2005. The number of woman students, too, is on the rise.

Many expected the chief actuary of ING Vysya Life Insurance Meena Sidhwani to become India's first woman appointed actuary (See: ). But tragically, she died unexpectedly after a short illness. Subsequently, the honours went to Hemamalini Ramakrishnan, who is now the appointed actuary of ING Vysya Life Insurance.

Looking forward, the scrapping of the administered pricing regime (detariffing) is expected to give a further boost to the actuarial profession, especially in non-life insurers. Unlike life insurers, who must have a full-time appointed actuary, non-life insurers can employ part-timers. In a free priced market, the brightest actuaries would have excellent prospects.

The past five years have also seen ASI taking a series of measures to prepare for the future. For instance, it has started holding global actuary conferences since 1999. The eighth global conference is scheduled to be held in Mumbai on March 10 and 11, 2006.

Some of ASI's initiatives include:

• An MoU with the Life Insurance Council to create the Mortality and Morbidity Investigation Bureau.
  
• Strengthening international relations by becoming a member of the East Asian Actuarial Congress.
  
• Signing an MoU with the Bangladesh Insurance Academy.
  
• A mutual recognition agreement with the Institute of Actuaries in London, the Faculty of Actuaries in Scotland and the Institute of Actuaries in Australia.
  
• Shifting the ASI office to its own premises.

A stormy five years
The past five years also saw an intense power struggle in ASI as well as heated debates about the actions taken by the ASI and the Insurance Regulatory and Development Authority (IRDA), concerning the profession and the members.

In 1999-2000 the insurance regulator's draft regulations governing appointed actuaries first generated the Indian versus foreign actuary debate amongst the members. With IRDA notifying its regulations, the country saw foreign actuaries from different countries getting employed here.

A couple of foreign actuarial consultancy firms have set up shop in India and even taken over Indian outfits. For instance Watson Wyatt has bought out MC Chakravarthi and Company in 2002.

According to consulting actuary R Ramakrishnan, the entry of foreign firms will have a beneficial effect on the Indian actuaries. "There has been no increase (in fact there appears to be only a decrease) in the number of Indian actuarial firms after liberalisation. The entry of foreign firms at this stage may bring awareness about the scope for private practice and encourage the younger generation to enter this area."

Many developed countries have started outsourcing actuarial functions. With increasing availability of actuarial talent in the country, a few foreign actuarial firms have already set up offices in India and started attracting outsourced functions. "It may not be long before Indian consultancy firms, too, enter this area," he adds. But, as the Actuaries Bill 2005 prohibits a corporate platform for actuarial companies, it has to be seen how it would impact some players.

Since 2001 elections for ASI office bearers came to be hotly contested. Only this year was there a consensus, with Dr R Kannan, appointed actuary of SBI Life Insurance being elected president unopposed.