We are pleased to present the results and insights from a recent survey of Indian life insurers, covering their approaches to managing participating business and performing asset share calculations. Twelve life insurers in India participated in this survey, representing around half of the industry. The insurers surveyed represent a range of sizes of par funds. The questions cover aspects such as sources of surplus shared with policyholders, triggers and limits on bonus declarations, asset allocation, and level of statutory reserves relative to asset shares. The share of respondents giving each answer is shown in on graphs in a series of slides, offering an interesting snapshot of how companies are managing this important product line. While insurers use a wide variety of practices, we offer a view of the different approaches by peer companies to highlight areas for review, refinement and improvement.

Market trends include:

• Persistency surpluses have become more commonly incorporated into asset shares than in previous surveys, although the market practice still varies.
• The market practice is mixed around allowances for cost of capital and cost of guarantee charges, suggesting asset share definitions do vary across insurers.
• Some insurers track the sources of surplus in the estate.
• The extent to which insurers believe that asset shares drive policyholders’ reasonable expectations is limited; benefit illustrations and the general economic environment appear to be more prominent factors.