He also said that there is nothing for the life insurance industry to worry for the time being with regard to government’s move on certain income tax exemptions as the alternative to invest still exists.
Khuntia also asked insurance companies to "weed out" loss-making products and concentrate only on the better paying ones.
On the IPO of Life Insurance Corporation of India announced in the budget, he said, "LIC proposal has not yet come".
"Any company which goes public there will be better corporate governance and better disclosure," he told reporters on the sidelines of an event of actuaries here.
On being asked if LIC’s business will need any restructuring before IPO, Khuntia said that work on the same is being carried out by the government.
He said it is a good idea for every insurance company to list and the Insurance Regulation and Development Authority of India (Irdai) will nudge entities to go for the same.
It is, however, not making it mandatory to list because smaller companies are yet to achieve the scale for going public, Khuntia said, adding that ideally a company should achieve sufficient scale to list within ten years of its existence.
He said the practice of annual product review needs to be carried out in full seriousness by the players and pitched for a weeding out of the loss making ones.
"I would like to encourage companies to weed out products which are not selling and simply adding to the number, then they will be able to manage those products well," he said, adding that the plea was made at a meeting with chief executives recently.
When pointed out about practices where industry players are compromising on financials in the health insurance segment while signing on to group schemes, Khuntia said the Irdai wants players to be sustainable, where they don’t create losses nor do they earn excess profits.
He, however, said that Irdai will not intervene on the pricing front but will limit itself to pointing out concerns to the players and issue notices if necessary.
Khuntia went public with his disappointment at the low growth levels of the life and general insurance segments despite the under penetration in India.
General insurance grew at 14 per cent last year as against its potential to grow at 17-18 per cent, while the life insurance segment grew only at 10 per cent as against the 12-13 per cent potential, he said.
Terming the actuaries as the conscience keepers of the insurance industry, Khuntia asked the Institute of Actuaries of India to take more efforts to increase the number, adding that inherent skill sets in mathematics and software make Indians very amenable to the stream.
He said India has only 460 actuaries for a population of 1.30 billion, while the US has 37,000 actuaries despite having less than a third of Indian population.
Khuntia said only LIC has undertaken efforts on micro-insurance and exhorted others to fasten up on the same given the needs in India.
Changing dynamics, including climate change and also aspects like the corona virus outbreak, present newer challenges before the industry and the actuaries will rise up to the same.
Khuntia said he is also trying to revive the loss prevention efforts like the now defunct loss prevention society for general insurance, explaining that a reduction in losses can bring down premium costs for policyholders and also make more people embrace insurance.