Page 83 - Risk Management in current scenario

However, this may not be appropriate, because, duration of liability thus
calculated is not true reflection of duration of liability. The actual position
of liability during the contract is post deduction of premium, and the
company is to pay to the customer accordingly. To address exactly this
problem, Society of Actuaries in 2007 set up a committee to come out
with some kind of solution. The paper shown below may be searched
for interested readers to read.

How Does Future Look Like?
Currently there is a lack of use of hedging financial products such as
Derivatives which may help companies in managing the interest rate risk.
The use of SST, may help in understanding the future interest rate
scenario which may be used in reading adversity into the future and
prepare for that. Moving to Participating Products, Unit Linked products
and protection products are other options in the future. With the
introduction of Risk Based Capital in India in future could be a game
changer in terms of selling the product classes and higher guarantees will
demand higher capital. Risk management likely to play key pivotal role
in managing risk.

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