A new article from S&P Global suggests that insurance companies that participate in the UK’s bulk purchase annuity market could benefit from increased oversight from both the British and Bermudian regulators.
Credit FAQ: Funded Reinsurance Deserves The Heightened Regulatory Scrutiny takes a deep dive into the inner workings of the funded re market, covering areas such as the recent growth of the market, the risk mitigations that insurers in the space employ, advantages of funded re when compared to longevity risk transfer, the key regulatory developments, and S&P’s view of the key risks in the market.
“Although it is still far more common for insurers to transfer only longevity risk to reinsurers, the U.K. and Bermudian regulators have already introduced new measures covering Funded Re. S&P Global Ratings considers that these measures will enhance the resilience of insurers. The new measures will contribute to stronger and more-consistent risk management relating to Funded Re transactions.,” says S&P in its article.