Role of Insurance in Financial Well-being

Talk at Junior College

Mr Tan Kin Lian qualified as an actuary in 1975. He was the chief executive of NTUC Income for 30 years from 1977 until his retirement in 2007.

In his talk, he will touch on the following topics:

* Economic functions of insurance
* Careers in insurance
* Role of an actuary
* Special skills requied to be an actuary

Insurance plays two important economic functions. It is a way of managing risks of individuals and businesses. Each person contributes a small sum of money (called a premium) into a pool to pay the claims of the people who suffered the insured losses. By reducing risks for all the parties, it helps people to carry out their economic activities and daily lives, without being financially destroyed by an unfortunate event.

Life insurance is also a way for ordinary people to make regular savings for their future needs. The funds that are mobilised can be invested for the long term to build the infrastructure and the productive capacity of the economy. It also earns a return on the funds to be shared by the investors.

The insurance industry provide careers for the following categories of people:

* marketing and sales
* customer service
* technical (underwriting risk and managing claims)
* investments
* administrative, support, technology and management functions

The actuary plays a special role in the insurance industry. He evaluates the risks and calculates the premium rates to be charged for the risks. His skill is applied in all fields of insurance, namely in life, general and health insurance.

He has to use two special knowledge:

* statistics showing the chance of occurrence of certain losses
* time value of money, as the losses may occur at various times in the future

Some actuary also play an important role in marketing and communication. He can explain the insurance and financial products in simple terms for the ordinary people to understand.

You can read more about Mr Tan and his special area of knowledge from the following:

Blog
Website