Browsing: Commentary
Opinion and observations from life risk industry insiders, academics and policy makers
The bulk annuity market has high barriers to entry. Firms require significant long-term capital and specialist expertise, including asset sourcing, actuarial modelling and risk management, and regulatory approval is not straightforward.
For investors, the fundamental value proposition of lifespan-based financial products is simple: they have near-zero correlation to traditional market indices and the often-chaotic impulses of global markets.
Gareth Truran of the Bank of England’s Prudential Regulation Authority offers a regulator’s view of the UK bulk purchase annuity market.
Given the importance of systemic risks such as climate change in determining the long-term stability of the insurance regime, insurers’ climate change approach should be considered as part of the scheme trustee’s selection process in the bulk purchase annuity market.
The International Capital Standard (ICS) introduces a new approach to discounting illiquid liabilities — one that includes an explicit credit risk premium. But how does it compare to Solvency II’s Fundamental Spread? And what might it mean for UK insurers already familiar with the Matching Adjustment?
As our population ages, the significance and frequency of falls increases. This affects life expectancy as well as morbidity and mortality.
Many firms maintain a longevity risk capital model, making sure the methodology remains relevant and proportionate to the risk. We shine a spotlight on these models here, considering how they may evolve with post-pandemic data and Solvency II reforms.
The ‘buyer’ of a bulk annuity contact is the scheme’s trustees, who are required to take formal advice as part of the process. However, the views of the sponsor are important for any bulk annuity purchase, and they should be involved from the outset, particularly if additional funds need to be paid into the scheme.
The third of our reviews of the Life Insurers Fact Book 2024 focusses on how factors that could impact the life settlement market are developing. Key amongst these are the surrender volumes, which help indicate the volumes of policies that could be available to trade, and the rate of new life insurance business which will provide the fuel for the market in future
The outlook for metastatic melanoma continues to improve, driven by advancements in therapeutic strategies and ongoing research.