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Finance and Investment Conference 2020

05-05 May 2020

About this event

Due to COVID-19, we are running this programme via a series of webinars commencing 5 May.

The environmental, social and governance (ESG) space is growing rapidly and increasingly moving centre stage. In many cases, it is now an essential part of policy and central to the way stakeholders make decisions for the long term to ensure retention of clients, manage risk better, and ensure more economically efficient and sustainable investment returns.

ESG factors cover a wide range of areas reflecting how vital consideration of these factors are part of wider systemic risks.

The IFoA’s policy regarding Coronavirus is designed to safeguard the well being of those who attend IFoA events. Find out more. 

Registration Tue, 05/05/2020 - 08:30 - 09:00 Registration and refreshments
Plenary session Tue, 05/05/2020 - 09:00 - 09:10 Chair's Welcome
Plenary session Tue, 05/05/2020 - 09:10 - 10:10 Plenary 1 - Macroeconomic and financial implications of climate change

Over the past half century global temperatures and extreme weather events have increased significantly. Persistent increases in temperature and/or more volatile weather can have long-term macroeconomic effects by slowing investment, hurting worker health and damaging productivity.  Climate change poses a significant threat across many regions and sectors, and businesses. Insurers and asset managers, must play a role in ensuring transparency around climate related risks and opportunities. It is no longer an option to ignore climate risk as it is a risk to liabilities and asset portfolios.This presentation will discuss the strengths and weaknesses of various climate-based scenario analysis methodologies, assess the long-term macroeconomic effects of climate change across a range of countries and highlight the use of carbon prices as a financial factor to help assess the impact of transition risk on the economy and investment portfolios. We will conclude by illustrating our approach for integrating climate change pathways into stochastic scenario generation.

Speakers: Natasha Margariti and Nick Jessop, Moody's Analytics

Transfer time Tue, 05/05/2020 - 10:10 - 10:20 Transfer Time
Workshop Tue, 05/05/2020 - 10:20 - 11:10 Workshop Session A

A1: Resilient portfolio construction: incorporating ESG and climate change

This talk will cover how to build better portfolios by ESG factor-neutralizing and how investors can position portfolios to be more resilient in relation to the wide-ranging financial effects of climate change.

Speakers: Martijn de Vree, Wai Lee and Hannah Skeates Wells Fargo

A2: ESG and climate change readiness – Putting it into practice

There is increasing focus on embedding ESG into insurance companies’ day-to-day activities. The PRA has recently issued a Supervisory Statement on managing the financial risks from climate change, and EIOPA is looking at the incorporation of sustainability into Solvency II.

But for many firms the question is ‘where to start?’. This is a wide-ranging topic, with a long list of terminology that is often confused, and evolving research and data analytics.

So in this presentation we will take a look at some of the practical ways in which firms can start thinking about ESG and implementing changes into their business, drawing on LV=’s own experiences.

Speakers: Ross Evans, Hymans

A3: Exclusions vs Engagement

This will cover the relative merits of negative screening against better engagement with firms and sectors before setting out why engagement is preferrable. This will consider when engagement cannot / does not work and why responsible investing may manifest differently for GI and Life funds as well as those with active or passive (or a combination) persuasions. We firmly believe that responsible investing does not mean investing in strongly rated ESG firms only but is also about engaging with firms to improve their ESG focus. Examples to cover include tobacco (and the various changes there) and certain fossil fuel investments.  

Speakers: Adam Ruddle, LV=

Refreshments Tue, 05/05/2020 - 11:10 - 11:40 Morning refreshments
Workshop Tue, 05/05/2020 - 11:40 - 12:30 Workshop Session B

B1:Tackling climate change risk, one scenario at a time

Technical session covering how a complex, long term climate change risk can be modelled and understood by asset owners.

Speakers: Jonathan Cross, Mercer

B2: ESG forays into fixed income : Alpha factor and not sacrifice 

Although ESG has many buyers across the asset allocation community, from pension funds to sovereign wealth funds, it still hasn’t found its place within the core asset management strategy desks where the money is actually invested. The problem as well as the opportunity is Fixed Income.
Plenty of strategies exist for incorporating ESG within Equities, from screening, integration to a combination. ESG has picked up relatively quickly within Equities with rating,indices created using ESG factors.
This talk will discuss how we price a quantifiable ESG credit risk premium and make it alpha worthy in a strategy. 

Speakers: Akshay Dua, Mercer
 

B3: Professional Skills

 

Refreshments Tue, 05/05/2020 - 12:30 - 13:30 Lunch
Plenary session Tue, 05/05/2020 - 13:30 - 14:30 Plenary 2 - Incorporating Climate Change in Analytical Tools

Climate change risks are likely to become material for many risk management and investment decisions. This will require to incorporate explicitly climate change in the tools used for risk management and investment decisions. At present existing climate change tools are often too crude for decision making. The presentation will discuss the data and analytical challenges in developing tools adequate for risk management and investment purposes and offer pragmatic solution for addressing those challenges.

Speakers: Miroslav Petkov, Parker Fitzgerald

Transfer time Tue, 05/05/2020 - 14:30 - 14:40 Transfer Time
Workshop Tue, 05/05/2020 - 14:40 - 15:30 Workshop Session C

C1: Deep dive into liquidity risk management–developing a robust framework

The release of the PRA consultation paper may signal a good time for insurers to review and update their liquidity risk management framework. Within this presentation we discuss our interpretation of what the PRA’s liquidity consultation paper means for insurers and how this compares to our understanding of current market practice through answering a number of questions.

Speakers: Sam Tufts and Ed Hawkins, EY

C2: Implementing ESG principles within Real Asset Investment Decisions

In this talk we cover the practicalities of implementing ESG within real asset investment decisions. Capital deployed in real assets is invested for a long term and has far reaching impact on the environment and society.  However, implementing ESG into real asset investment decisions is not straightforward and requires a different approach to public market assets.  The range of investment opportunities can be vast and across multiple private asset classes, sectors and geographies.  Even within a specific asset class each asset is idiosyncratic and requires a very bespoke ESG assessment.  Further, the answers are not always black and white and multiple factors need to be considered, ultimately needing one to find a balance between the expected positives and negatives over the lifetime of the asset.  This session will provide senior managers and practitioners a good overview of the considerations when implementing ESG principles in real asset investment decisions.

Speakers: Munawer Shafi and Stanley Kwong, Aviva Investors

C3: Sustainable private equity investment, an insurer’s free lunch? 

This talk expands on recent changes to Solvency II regulation to include sustainability risks and explores whether private equity offers an opportunity for making l long-term and impactful investments. 
We will answer the following questions: 

  • How sustainable private equity could be used in your portfolio to qualify for more favourable capital treatment under Solvency II?
  • What are the specific risks from this investment and can these be mitigated?
  • Is there even an illiquidity premium in Private Equity?

Speakers: Punil Chaubal and Daniel Banks, River and Mercantile Solutions

Refreshments Tue, 05/05/2020 - 15:30 - 16:00 Afternoon Refreshments
Plenary session Tue, 05/05/2020 - 16:00 - 17:00 Plenary 3 - TBC
Other Tue, 05/05/2020 - 17:00 - 17:05 Chair's Closing
Other Tue, 05/05/2020 - 17:05 - 18:05 Careers Session
Networking Tue, 05/05/2020 - 18:05 - 19:15 Drinks Reception

Presentations will be available closer to the conference date.