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Life 2021 Webinar Series

  • Life Webinar Series 2021

About this event

Join leading experts to discuss key issues, emerging ideas, and new research across the Life insurance sector.

Two sessions that were pre-recorded can be downloaded below for members. Non-members, please contact Niki Park if you would like to purchase the video(s). 

Hidden depths – why the PRA is looking again at the liquidity premium
HMT’s review of Solvency II, launched in October 2020, includes the Matching Adjustment (MA) as an area of potential regulatory reforms in the UK. Thinking back to the introduction of Solvency II, the aims of the new regime were partly to improve on the risk-insensitive nature of Solvency I with a more risk-based framework, ultimately to improve signals to risk management. The PRA is supportive of the principles underlying the MA. However, the PRA has also expressed concern with the implementation, particularly that some of the returns treated as a liquidity premium by the MA might instead be compensation for uncertainty around future credit losses. In this presentation we will explore the conceptual case for an MA design which explicitly recognises compensation for variability around future credit losses and is more responsive to signals about credit risk, and hence how this may overcome the risk-insensitive aspects of the current framework.
Speakers: Dan Georgescu, Wendy Fu and John Taylor, Bank of England


Transition and default risk capital modelling - Extreme Events Working Party

Kindly sponsored by 

Under the European Union’s Solvency II regulations, insurance firms are required to use a one-year VaR (Value at Risk) approach. This involves a one-year projection of the balance sheet and requires sufficient capital to be solvent in 99.5% of outcomes. Credit transition risk is one of the key risk drivers for firms with large annuity books and/or large corporate credit exposures on their balance sheets on both the asset side as well as liability side particularly due to the matching adjustment. The recent market activity post-COVID-19 particularly has shown that the low yield environment may persist for longer which pushes the insurers to seek higher-yielding assets, e.g. liquids or non-traditional credit assets and as a result, ever more emphasis has been placed by the stakeholders on better understanding the credit risk that eventually gets reflected in more sophisticated approaches to credit risk measurement, monitoring and reporting. In this talk, we look at transition and default risk for credit assets in the context of the Solvency II requirement to develop a 1 in 200 VaR and full risk distribution. We have performed the analysis of the data presenting the key features any credit model should attempt to capture. We have explored various calibration models used and provided a comprehensive summary of the key expert judgments, advantages and limitations of these models.
Speakers: James Sharpe, Sharpe Actuarial Limited, Florin Ginghina, Milliman and Gaurang Mehta, Eva Actuarial 

Please also note that Milliman have a Hot topics networking session on Wednesday 24 November at 10.30-11.30

Please browse the week long webinar schedule below.

Conference Sponsor: Milliman
Plenary session Mon, 22/11/2021 - 12:00 - 13:30 Plenary: The sustainability of the Insurance industry? It's debatable!

We will host a 3 part debate covering some of the key issues of sustainability facing the profession.  The panel will probe each of the areas presenting their views in a wide reaching discussion, covering sustainability of the profession and the industry now and in the future.

  • Sustainability of the actuarial profession: Are actuaries the necessary voice of reason or does their professionalism hinder innovation?
  • Sustainability of the industry now: Will advanced analytics eliminate the opportunity to pool risk, or will it provide more access for higher risk groups?
  • Sustainability of the industry in the future: Has the innovation kick- started by the pandemic shown how the industry can change, or has it taped over the cracks for the revolution needed for the next wave of challenges, e.g. climate change?

Session sponsored by Milliman Sponsor

Host: Ewen Tweedie, PwC

Speakers:

Matt Saker, Aviva and IFoA President-Elect

 

 

 

Katya Maclean, Guardian Financial Services

 

 

 

John Taylor, IFoA Past President

 

 

 

 

Peter Heffernan, PwC

Workshop Mon, 22/11/2021 - 14:00 - 15:00 Merging With-Profits Funds: Scottish Amicable and Prudential

The Scottish Amicable Life Assurance Society demutualised in October 1997 following its acquisition by Prudential, since when the Scottish Amicable Insurance Fund operated as a ring-fenced mutual with-profits sub-fund in Prudential Assurance Company. The SALAS demutualisation Scheme required SAIF to merge with PAC’s other long-term business immediately upon a sunset clause being triggered. The timing of that was uncertain, as it was influenced by markets, but it was broadly expected to happen in 2024. However, the Scottish Amicable Board and the PAC Board decided that an early merger was in everyone’s interests, and this happened in April 2021. Getting there was not quick, and nor was it easy, but it was controlled, orderly and ultimately successful.

To secure ongoing and sustainable futures for their policyholders, fund merger and consolidation is an issue that many other with-profits providers are grappling with. We would like to share our experiences to help others, including:

• How different things are now compared to 1997, with significant changes in economic, demographic and regulatory environments.
• Practical considerations, including the need to go back to Court to make this work smoothly even though early merger was already allowed.
• The sometimes-competing considerations in ensuring the ongoing fair treatment of SAIF and PAC policyholders.
• The need for clear and effective communication – with boards, with regulators, and ultimately with policyholders.

Speakers:

Phil Roberts, Prudential 

 

 

 

Stephen Makin, Hymans Robertson

Workshop Mon, 22/11/2021 - 16:00 - 17:00 Healthcare Innovation: What to Expect for the Future

AI Cancer Screenings 

  • Screening programmes 
  • AI to replace the second reader
  • Barriers – time it takes

Immunotherapy innovation

  • Two vaccines in widespread use that can prevent the development of cancer but availability isn’t high
  • The way they are manufactured and what is in the market / coming in the future
    Currently expensive and / or ineffective 

The questions for our industry

  • Critical Illness claim volumes- increasing diagnoses within term?
  • Increasing detection rates/earlier stage detections and CI definitions
  • Terminal Illness- new therapies and the impact on survival
  • Underwriting cancer survivors
  • The role of genetics

Speakers:

Dr Jack Halligan, Pacific Life Re

 

 

 

 

 

 

 

Ian Rowe, Pacific Life Re

Workshop Tue, 23/11/2021 - 09:00 - 10:00 Approaching IFRS 17 Transition

The IFRS 17 Standard sets out how the Contractual Service Margin should be calculated for the IFRS 17 opening balance sheet at 1 January 2022. The standard should be applied retrospectively from the issue date of in-force contracts unless this is impracticable, in which case the insurer has a choice between a modified retrospective approach and an approach based on the fair value of the liabilities at the transition date. The approach to transition will determine how much profit is recognised in equity at transition and how much emerges in the furture.This talk will consider the requirements of the Standard and the different approaches available to insurers, before discussing the practical challenges that may be common to all implementation programmes.

Key discussion topics will include:

  • Data, systems,
  • Use of estimates, etc.
  • Under the retrospective approach,
  • The challenges around calibrating a fair value.

This talk is a collaboration between speakers:

Richard Olswang, Prudential

 

 

 

 

 

 

Ian Boyd. Deloitte

 

 

 

 

Lionel van Niekerk, Deloitte

Workshop Tue, 23/11/2021 - 12:00 - 13:00 Making flagstones - what makes a good pathway for sustainability and how to make that decision useful?

With so much at stake, it is self-evident that investors, pension schemes, insurers and regulators need to act.

But how?

And how to get comfortable with the rampant uncertainty and modelling anything robustly?

What does a good decision even look like in the face of uncertainty?
In this joint talk from Ortec Finance and Cambridge Econometrics, we will work through the modelling chain from climate impacts to economic impacts to the effect on financial markets - examining what good looks like and what sort of decisions can be made at each stage of the process. 

Speakers: Russ Bowdrey, Ortec Finance and János Hidi, Cambridge Econometrics

Workshop Tue, 23/11/2021 - 14:00 - 15:00 How can we help retirees achieve a sustainable income in retirement?

Against the backdrop of an increasing transfer of risks from institutions to individuals, retirees are faced with an unprecedented amount of choice around their retirement planning. We look at how actuaries can help individuals to identify what a sustainable level of income is, particularly in the current low interest rate environment, and the issues that this creates for retirees in generating a sustainable level of income. We explore the nature of the advice market and how tools are being used to assist these individuals in understanding their risks and making better retirement decisions. 

Speakers:

Fyona Murphy, Hymans Robertson

 

 

 

 

Karen Brolly, Hymans Robertson

Workshop Tue, 23/11/2021 - 16:00 - 17:00 M&A - A view for Europe

The European life insurance M&A market has been a hotbed of activity for many years. With appetite for M&As projected to continue to grow through 2021 and beyond, it is a very exciting time to be involved in this space.

Richard Baddon, Deloitte Partner, and Peter Ford, Deloitte Director and ex-Aviva Director of Global Life, have extensive market experience, between them having been involved in the vast majority of transactions in recent years. Together, they will:

•Give a broad overview of historical European M&A activity
•Share insights and learnings from significant transactions, identifying key trends
•Discuss what the future of the market may look like

Speakers: Peter Ford and Richard Baddon, Deloitte

Workshop Wed, 24/11/2021 - 09:00 - 10:00 Climate change and sustainability: What are the IFoA doing to support you?  Updates from the IFoA’s Regulatory Team and from the Life Climate Change Working Party

In the first part of the webinar, we will provide insights into the significant regulatory work at the IFoA, which impacts areas where actuaries provide advice and expertise.

The presenters will provide an update on the findings of the Climate-related risk information gathering exercise, which looked into what work actuaries are doing in this critical area. They will also cover the current consultation on proposals for related changes to the regulatory framework.

In Part 2, we will provide an introduction to the newly formed Life Climate Change WP - our scope, how we intend to interact with the Sustainability Board and other WPs.

We will also provide a summary of the introductory work that will have been carried out in each of our four workstreams - Risk frameworks, Asset Risks, Liability Risks and Reporting - building libraries of content for life actuaries and identifying and summarising approaches being used by companies, both in the UK and overseas. 

Speakers: Leisha Watson, Alan Marshall and David Gordon, IFoA, Scott Eason, Barnett Waddingham Clara Yan, Robeco, Craig Follows, M&G Plc, Miriam Sweeney and Rajinder Poonian

Workshop Wed, 24/11/2021 - 10:30 - 11:30 Milliman Hot Topics Session

Milliman Sponsor

We are delighted to invite you to join us for the Milliman Hot Topics Session at the Life Webinar Series, where we will provide insight on three current hot topics. Milliman Chairperson:  Philip Simpson

PRA QIS Exercise

Milliman Speakers: Russell Ward & Sihong Zhu

The PRA is currently undertaking a QIS exercise to help review of certain aspects of Solvency II, in particular the Matching Adjustment and the Risk Margin.  In this session, we will share the numerical analysis we have undertaken to quantify the potential impacts of the alternative approaches to both these key aspects of Solvency II.

 

IFRS17 Fair Values

Milliman Speakers: Philip Simpson & Dilesh Patel

In carrying out the transition to IFRS17 for their back-books, many UK life companies are making use of the Fair Value approach for at least part of their business. This session will cover the different approaches to determining Fair Value which we see in use, both in the UK and internationally, and the pros and cons of those approaches.

 

Equity Release Mortgages

Milliman Speakers: Robert Bugg & Florin Ginghina

Equity Release Mortgages continue to be a hot topic for many companies and the PRA.  In this talk, we will discuss the latest developments in relation to ERMs as an asset class used by insurers to back annuity business, covering both market activity and technical issues, and including how insurers are addressing the regulatory requirements of SS3/17.

Workshop Wed, 24/11/2021 - 12:00 - 13:15 Bringing analytics to life – maximising the upside, minimising the downside

This session will look at how and where advanced analytics are being used in the life industry, considering what factors lead to successful business outcomes and how to avoid potential disadvantages around model risk and customer fairness.  

  • Drawing on Willis Towers Watson’s recent European Life Insurance Analytics survey to see what techniques have added the most value, and where the key challenges are.
  • What lessons can we learn from general insurers about where best to use advanced analytics and how to ‘scale up’?    
  • What are the best ways to develop and structure an analytics function, to focus resources and to engage the wider business?
  • How do we control the model risk around more advanced analytics?
  • How can we ensure customer fairness is not only respected but even improved?

The presenters draw upon their own practical experience of implementing analytics in life and general insurance, considering the challenges and potential solutions. This is not a technical session, and will be of interest to those involved in developing analytics or in using the results of those analytics.  

Speakers: Matthew Edwards, Alastair Black and Chris Halliday, Willis Towers Watson

Session sponsored by Milliman Sponsor

Workshop Wed, 24/11/2021 - 14:00 - 15:00 Developments in Part VII transfers and Schemes of Arrangement from the point of view of legal experts and the Independent Expert

Part VII Insurance Business Transfers

  • The major developments that we have seen in Part VII transfers over the past 12 months.
  • The implications of the recent proposed changes to the guidance on Part VII transfers from the PRA and the FCA.
  • Our views on some changes we might see in the future

Schemes of Arrangement

  • Recent use of schemes of arrangements by insurers
  • Legal framework: lessons to be learnt
  • Role of the Independent Expert
  • Pro and cons

Speakers:

Oliver Gillespie, Milliman

 

 

 

 

 

 

Hammad Akhtar, Pinsent Masons

Workshop Wed, 24/11/2021 - 16:00 - 17:00 Latest view of regulatory and macro-economic impacts from the HM Treasury Review of Solvency II

In February of this year KPMG carried out independent analysis for the Association of British Insurers (ABI) to illustrate the impact of their submission to HM Treasury Review of Solvency II. The independent analysis estimated the regulatory and economic impacts of different proposed reforms to Solvency II regulations. Subsequently, the PRA have launched a Quantitative Impact Study (QIS) containing detailed calibrations for Insurers to model, in advance of further HMT consultation in 2022. This talk will review the proposed reforms and their impacts as put forward by the ABI to the HMT Review, the potential impact and implications of the PRA QIS specifications and provide a point of view on the direction of travel for UK Solvency II in 2022.

Speakers: James Isden, KPMG and David Otudeko, ABI

Workshop Thu, 25/11/2021 - 09:00 - 10:00 The crucial role of scenario and stress testing

Stress and scenario testing (“SST”) has been a crucial part of the life insurance regulatory landscape for a number of years. With renewed focus from the PRA on SSTs and its intention to utilise SSTs part of their supervisory toolkit, some firms are revisiting their SST processes. Whilst some firms have made large investments to facilitate SSTs, it still presents firms with challenges as well as opportunities.

In this talk, Deloitte experts will share their insights on SSTs , supplemented with early insights from a recent Deloitte survey which includes participation from most of the large UK life insurers. The talk will cover:

•Current best practice in the market
•Challenges facing firms and suggested solutions
•Areas of potential further development including wider uses of SSTs

Speaker: Kanchana Kahakachchi, Peter Ford, Deloitte and Jenny Elliott, Aviva

Workshop Thu, 25/11/2021 - 12:00 - 13:00 IFRS: Just over one year to go until it is (finally) live!

With just over 1 year to go before IFRS 17 is live, the Financial Reporting Group (FRG) of the IFOA will provide:

- An update on latest developments including both UK and EU endorsement of IFRS 17.
- A deeper dive on topical UK implementation issues for key product lines such as annuities and with-profits and including transition.
- Views on the future of KPIs and investor expectations for IFRS 17.
- A summary of the UK and International support to actuaries working on IFRS 17.

Guest speakers:
- Peter Drummond – Senior Project Director at the UK Endorsement Board
- Darren Clay – Senior IFRS 17 Actuary at Phoenix

Speaker from the FRG: Anthony Coughlan (Chair) and Kamran Foroughi 

Workshop Thu, 25/11/2021 - 14:00 - 15:00 The CMI and COVID-19

This session, based on the CMI’s recent work, provides insight into mortality during the COVID-19 pandemic, to help stakeholders take appropriate action for their portfolios. We will cover:

  • Differences in mortality between the general population and annuities and assurances policyholders.
  • An initial view on future CMI outputs, and our views on using 2020/2021 data in experience analyses
  • Changes to the CMI Mortality Projections Model for CMI_2020.

Speakers:

Matthew Edwards

 

 

 

Cobus Daneel, CMI

Workshop Thu, 25/11/2021 - 16:00 - 17:00 Climate Change Assessment Exercises in the UK and EU

In this presentation we look at the various exercises either completed or being undertaken by institutions in the UK and EU to assess the impact of climate-related risks on banks and insurers.
Recent exercises have favoured stress testing and scenario analysis, using early, late and no additional action scenarios to assess both transition and physical risks. We will compare the various scenarios being explored and methodologies being employed. In particular, we provide a comparison between two bottom-up exercises: the Climate Biennial Exploratory Scenario (CBES) run by the Bank of England and the 2020 Climate Pilot Exercise conducted by the ACPR in France.
Climate change assessment exercises offer real insight into the risks that firms and economies face, help to highlight where action may be required, and encourage firms to think about their sustainable over a 30-year time horizon and beyond.

Speakers:

Natalia Mirin, Grant Thornton

 

 

 

Marcus Page, Grant Thornton

 

 

 

 

 

 

Conal Shirazi, Grant Thornton

Workshop Fri, 26/11/2021 - 12:00 - 13:00 Waking up to Nature – the biodiversity imperative in financial services

This session will cover:

•Insights into the scale of biodiversity loss and the action imperative for our industry
•Overview of how biodiversity plays a critical role in the delivery of ecosystem services, exploring how financial services are embedded within nature and not external to it
•Extended case study discussion exploring how biodiversity can be both a material financial risk and opportunity for financial services, and for the actuarial profession
•Biodiversity initiatives and frameworks to add to the actuarial skillset including the Dasgupta review, TNFD and the Finance for Biodiversity Pledge
•Tangible actions which financial services firms and actuaries specifically can take today to drive change

Speakers:  Sandy Trust, EY and Ryan Allison, Phoenix Group