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University Of Mumbai

Role Of Actuaries In Insurance Sector

Submitted for fulfillment of requirement for the award of degree


Bachelor of banking and insurance

Tilak College of Science and Commerce

Vashi Navi Mumbai-400703


Submitted by Submitted To

Student Name Under Guidance Of

Vishal Sakpal (TYBBI) Prof. M/s. Abha Maheshwari

`Roll no 72036

Insurance is the equitable transfer of the risk of a loss, from one entity to another in
exchange for money . It is a form of risk management primarily used to hedge
against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is
selling the insurance; the insured, or policyholder, is the person or entity buying
the insurance policy. The amount of money to be charged for a certain amount of
insurance coverage is called the premium. Risk management , the practice of
appraising and controlling risk, has evolved as a discrete field of study and
The transaction involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the insurer's
promise to compensate (indemnity) the insured in the case of a financial (personal)
loss. The insured receives a contract, called the insurance policy, which details the
conditions and circumstances under which the insured will be financially

1.To know the role of Actuary in Insurance sector.

2.To understand who an Actuary is

3.To know the importance of Actuary with regards to life and non-life insurance.

4.To know the Institute of Actuaries of India .

5.Envision the possibilities for an actuarial wellness model and the actuarys role
in wellness.
6.Document what currently exists in the marketplace

1.An actuary really plays an important role in Insurance.

select Actuary for the project, because people never having heard of an Actuary.

2.The reason for taking this topic is to make everyone aware of work of actuaries,
which is most important in Insurance Company.

3.An Actuary decides as to what amount of money a policy holder should pay as
premium or what sum should be given as pension amount or returns by the

4.Actuary calculates insurance risks and premiums. Technically speaking the job
of an actuary is to assess the financial impact of an uncertain future event. Roughly
speaking they look at the financial aspect of disasters; sarcastically speaking they
are financial astrologers.

Methodology is the systematic, theoretical analysis of the methods applied to a

field of study. It comprises the theoretical analysis of the body of methods and
principles associated with a branch of knowledge.
1.Primary Data
2.Secondary data


Secondary data is collected from magazines, newspaper, etc.

Source of data collection: - social networking sites, books, newspaper, etc. 3
Lakshmikutty and Baskar (2003) analyse the distribution channels, in life
insurance industry from the perspective of the socio-cultural ethos. Challenges
posed in managing different channels, to be faced by life insurance companies
have been assessed. In defining a distribution model, its cost effectiveness and its
capability to reach a large section of population are some of the critical aspects to
be addressed by the life insurance companies to be successful in life insurance
business, rather than the technology which is only an enabler.

Roth and Athreya (2005) provide a broad overview of how the microinsurance
programme works and it places particular focus on the micro-agent as a distributor
of life insurance products. Due to the low value of microinsurance premiums, low
cost distribution is very critical in microinsurance distribution. The benefits and
possible shortcomings of micro insurance distribution strategies are discussed in
the paper. While the micro-agent model holds much promise, the scheme is still
too new to be definitively declared a success or failure.

According to Mandal, (2006), Insurance being a service with very high degree of
intangibility, the role of intermediaries is very vital to the distribution of insurance
products. Individual agents dominate Indian life insurance distribution. Study lists
down the key attributes to become successful as a life insurance agent. Agents
role does not come to an end with the sale of policy but it marks a beginning of
relationship between the customer and the agent as life insurance contracts are long
by nature.

Moss Adams (2006) under the aegis of LIMRA International in June of 2006
surveyed members of LIMRAs producer panel to investigate their current practice
model, the practices of carriers (distributors) and the succession planning support
from their carriers. In addition, the respondents provided information about the size
of their clientele, the type of agency structure and its ownership, the types of
products and the services they offer. The industry has entered a new era with
unprecedented ways to align customer, distribution, and corporate interests.

The research study deals only with the actuaries part of the overall
insurance concept.

The study is conducted in a time span of 2-3 months therefore data collected
will be time consumable .

The research is done in the area of Vashi for collecting the primary data.

Sources of data are more reliable than actual practice.

Practically difficult to data collected.