Professor G. S. Diwan | Insurance Hall of Fame

Prof. G. S. Diwan's career spans a period of about 6 decades in India, where he achieved excellence in teaching, development of the actuarial profession in India, government service and consulting. After receiving his degrees (B. A. and M. A.) in mathematics in 1922 and 1924, respectively, he joined Ferguson College as teacher of mathematics and served there until 1926. He then joined Elphinstone College as a teacher in mathematics and served there until 1936-7. In 1937, he joined Sydenham College, Bombay, as a teacher of actuarial science and continued in that position until his retirement in 1956. Even after his retirement, however, he worked for the Government of Bombay and as a consultant in non-life insurance. His consulting centered on life office valuations, valuations of life interests, gratuity valuations, etc. His most significant contributions were as a teacher of actuarial science, one of India's first, and foremost, though he achieved distinction in many other areas

The profession of actuary was hardly known in India when he passed his Associateship for installation into the Institute of Actuaries. He was only the 14th person in India to complete his fellowship at the Institute.
He also wrote a book on Differential Equations along with one of his students in mathematics. The Diwan-Agashe book was considered the most challenging in India for bright students in Mathematics. It was also prescribed for engineering students and was in use up to the advent of computers and the developments of modern mathematics.
In 1937 he began to teach mathematics and actuarial science at Sydenham College. At that time only a small number of students selected this "new" subject. During this period he also completed the Fellowship examination of the Institute of Actuaries, London (1942), being only one of a handful to have achieved this at the time. [The Sydenham College was the center for examinations and the principal of the college was honorary supervisory of the examinations.]
Many of his students, perhaps over 30, qualified as fellows of the Institute of Actuaries. His teaching was considered the best in India, always aimed at carrying knowledge to even the weakest students. He would explain mathematical and actuarial concepts and formulae in simple terms. All services for students were given without charge and he gained a reputation as the man to go to for actuarial questions and problems. His students gained high positions in various fields including state-sponsored financial institutions, including the Life Insurance Corporation of India and the General Insurance Corporation.
In 1951, the Government of Bombay decided to set up an insurance fund to handle the increasing requirement of insurance coverage for its own properties, trade, and goods, and transport. A post was created in government for an Insurance Officer in the Financial Department to handle the affairs of the fund. Prof. Diwan was chosen for this post and he handled the responsibilities simultaneously with his teaching at Sydenham College.
In this newly established Insurance Division in the Finance Department of the Government of Bombay he performed a pioneering role. All along he had been in the teaching profession and had practically no exposure to government and administration. His acquaintance with non-life insurance had not been developed. But he quickly got going and put the Insurance Fund of the government on firm footing. Everything connected with the fund had to be performed as a bootstrap operation without guidance. With his skills, all of those who worked with him, who had no acquaintance with insurance, developed expertise. The recognition he received for this work is illustrated by the fact that the government invited him to head the Insurance Department of Gujarat State. His association with the Finance Department of Bombay also proved helpful in getting the post as lecturer in actuarial science in an upgraded (or senior) level.
After qualifying as a fellow of the Institute of Actuaries, London, he started his consulting practice in actuarial science. As per government rules, he was required to pass on half of his income from consulting to the government. Despite this, he carried on his practice working with small insurance companies who could not afford full time services of a qualified actuary. His first assignment was from Commonwealth Insurance Company of Poona. His son, also an actuary, during his student days soon joined him in this consulting practice.
In 1962, he was appointed non-executive director of the Board of the newly formed Deposit Insurance Corporation. The Corporation was formed to provide insurance protection to bank depositors. The protection was in the form of a guarantee amount equal to the actual amount of deposit or the minimum guaranteed amount, whichever was lower, whenever a bank went into liquidation.

During the period of his directorship of the Deposit Insurance Company, he conducted a detailed investigation into the past experience of bank failures and the losses caused to depositors as a result, during the period 1951-52. From this investigation, he developed steps to create an early warning system for banks' development problems so as to prevent losses to depositors.

The investigation he undertook provided a scientific basis for assessing premium required for covering bank deposits. He ensured that the investigations done by him were discussed by the professional body of the Actuarial Society of India, which had been formed in 1944.

He was an active member of the Actuarial Society and was honored on many occasions for his contributions to the development of the profession in India. He received the Society's gold medal in 1980 for his contributions.

His philosophy was that actuarial education could be used with great advantage in many fields besides that of life insurance. He urged the creation of an Indian qualification in actuarial science. Before that time, the only recognized qualification for an actuary in India was the Fellowship of the Institute of Actuaries in London. The syllabus of that Institute's examination had been framed keeping in mind major fields of application in the United Kingdom. His strong belief was that there was a dichotomy between what the Indian actuary was required to study because it didn't take into consideration the students' career in India and often stood in the way of development of methods and procedures appropriate to situations in India.

His desire to have India conduct its own examinations leading to Fellowship qualifications remained unfulfilled when he passed away in 1987. Later, the Actuarial Society finally recommended its own examinations in 1989, and his writings on the subject were prescribed as one of the reading materials for Fellowship. Particularly, he had written a book on Gratuity Valuation, a topic peculiar to Indian environments and this was required reading.

Upon nationalization of insurance in India, the issue of "differential bonuses" came up in 1956. Some 240 individual life insurance companies were merged upon nationalization and each had different strengths in their life insurance funds. It was, therefore, necessary to ensure that policyholders of those companies who held with-profit policies got a fair share of the surplus arising through the operations of the Life insurance Corporation of India. The Life Insurance Corporation provided that it would assess the relative strength of the various companies and develop a scheme of differential bonuses. This scheme was to be announced by the Corporation prior to approval by the government of India.

From the study of the scheme, Prof. Diwan said that he felt it was not fair to policyholders of some companies. He raised the issue publicly with the Actuarial Society of India. He filed a lawsuit on behalf of policyholders who had lost under the new scheme. He had to locate each of the policyholders. He demanded fair treatment to all policyholders. The practice of treating such petitions as public interest petitions was not in vogue during those days, and though he did not succeed in his effort, he fought the issue until the end.