An air of assurance
19 July 2005
He's the man in the hot seat. Venkatachari Jagannathan talks to LIC chief actuary G N Agarwal; the man who develops new products, prices them and is presently engaged in the mammoth task of estimating the embedded value of LIC's 17 crore policies.
Being the appointed actuary of a life insurer that has 17 crore policies worth Rs4.4 lakh crore ($100 billion) is not a simple job. The challenge is even greater when one has to meet the policyholder's reasonable expectations in a falling interest rate scenario, tackle artificially created solvency margin issues and deal with the company's expanding operations overseas; all at a time when in-house actuarial talent is constantly being poached by the competition.
G N Agarwal is the man in the hot seat. He's the chief (actuarial) and appointed actuary of one of Asia's largest life insurers, the Life Insurance Corporation of India (LIC). A postgraduate in mathematics from Agra University, Agarwal is also the vice president of Actuarial Society of India (ASI) and edits the Actuary India, the institute's professional magazine.
He told Ventatachari Jagannathan that merging the diversity of products, practices as well as improving upon the current system and methods to raise standards is the real challenge of the near future for LIC. Agarwal is presently spearheading a massive effort to calculate the embedded value of LIC's policies. He discusses the challenges he faces. Excerpts from an exclusive interview:
With the opening up of the life insurance sector, what are the new challenges you face?
In a competitive environment, every insurer wants to have unique products, which are not directly comparable with the products of other insurers. The sales force, on the other hand, wants to have every kind of product, so that they don't have to say 'no' to any client. This increases demands on us, particularly so in the case of LIC, which has more than 10 lakh agents.