New Delhi: After the initial public offering (IPO) of LIC, around 60 percent of the insurance business will be carried out with listed companies, said Amit Agarwal, additional secretary in the Ministry of Finance.
The Cabinet Committee on Economics (CCEA) gave its approval in principle to the listing of the insurance giant Life Insurance Corporation of India (LIC) in July.
The state life insurer’s initial public offering is part of the government’s efforts to do that ₹1.75 lakh crore from divestments in the current financial year.
Speaking at an Actuarial Day event, Agrawal said that amid global challenges, India has continued to develop as an emerging economy with a mature, deepened and scalable financial system.
The needs of this emerging India are different in many ways, he said, adding that the insurance sector has matured in the two decades since competition and regulation was introduced with 69 insurers today, down from just eight in 2000.
“The majority of them have passed their initial break-even phase. Once LIC is planned to be listed, about 60 percent of the insurance industry’s business would be with publicly traded companies. The sector as a whole is growing much faster than that. “The overall economy,” he said.
There are currently four listed life insurers and two in the non-life segment. The state reinsurer General Insurance Corporation of India is also listed.
Agarwal said the actuary profession is key to developing new solutions that this emerging India and its maturing insurance sector needs.
Risk perception has increased due to the pandemic of the century, he emphasized.
“Other global risks are also looming, major concerns about climate change and the increasing frequency of catastrophic events have sharply increased awareness of environmental risks.
“Additionally, as technology change and innovation accelerate, new ways to do business and participate in individual activities are constantly emerging,” he said.
Although no historical data is available on this, the associated financial risks still have to be managed.
New forms of cyber risks and new transport solutions such as autonomous vehicles and space travel are just a few examples.
It is therefore necessary to address new risk areas by expanding the use of actuarial methods in traditional areas such as insurance, pensions and benefits.
Fertile ground for developing innovative approaches to assessing and managing such risks is already available in the form of ever-increasing amounts of data and a multitude of data, coupled with the improved ability to connect secondary and tertiary data points across activities in near real time, said he
Actuaries can help develop a wealth of new solutions by actively engaging with businesses and technology to identify new opportunities and address emerging challenges, the official added.
Even in traditional areas like insurance and pensions, actuaries can enrich risk management if individually trained actuaries consider moving into other departments like finance, marketing and insurance, depending on their inclination and aptitude, he added.
This story was released from a news agency feed with no changes to the text. Only the heading was changed.
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