Insurers, actuaries tie up for mortality centre

The Life Insurance Council (LIC), the industry body of life insurance companies in India, and the Institute of Actuaries of India (IAI) have signed an agreement to set up the Mortality and Morbidity Investigation Centre (MMIC).

MMIC, which will function as an extended arm of IAI, will be responsible for computing the new mortality and morbidity tables for the life insurance industry in India.

Life insurance companies refer to the mortality and morbidity data while computing premium for their various insurance products.

A mortality table indicates the probability of the death of male and female policyholders at all ages, whereas a morbidity table offers insights into the probability of incidence of diseases.

An overhaul of the mortality and morbidity data will benefit policyholders since risk premiums will be more specific to demographic sub-sections in terms of age, occupation and location.

Similarly, incidence of diseases can also be analysed and risk premium tables prepared more accurately reflecting the exposure.

LIC Secretary General S V Mony and IAI President G N Agarwal signed the agreement in Mumbai recently.

MMIC, which will draw technical expertise from IAI, will be funded by LIC.

S V Mony said, "The setting up of MMIC is an important milestone in the development of life insurance, pensions and health insurance. Given the existing low penetration of life insurance in the country, the new mortality and morbidity tables will provide more risk-based rating tables for different segments of society and the benefit of policyholders. This, in turn, can be expected to spread insurance faster and wider."

G N Agarwal said, "The data overhaul will help the industry in designing innovative products and help expand the insurance coverage and reach across the average Indian household in the country."