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  • Life 2022

About this event

Life Conference returns as an in-person conference in 2022, giving you an opportunity to connect with your peers and fellow actuaries in your sector, in person.

Join leading experts to discuss key issues, emerging ideas, and new research across the Life insurance sector. Topics covered will include Data Science, DEI (diversity, equity and inclusion), ESG (environmental, social and corporate governance), climate change, and overviews of international/regional markets and/or actuarial practices.

After dinner speaker confirmed on the Thursday evening - Simon Reeve, British author, journalist, adventurer, documentary filmmaker and television presenter

Simon Reeve is a TV presenter and bestselling author with a passion for wildlife, history, current affairs and the environment. The presenter of numerous acclaimed Television series, he has travelled extensively in more than 120 countries. His recent book Journeys to Impossible Places: In Life and Every Adventure is a Sunday Times best seller.

We are pleased to announce two keynote speakers who will also be joining us at the conference

Sir David King (23 November 18.30-19.30) 

Sir David King

Sir David King is the founder and chair of the Centre for Climate Repair at Cambridge University. From September 2013 until March 2017 he held the position of permanent Special Representative for Climate Change. From 2000 to 2007 he was the government's Chief Scientific Advisor, during which time he raised awareness of the need for governments to act on climate change and was instrumental in creating the Energy Technologies Institute.

 

 

 

 

 

Susie Dent (25 November at 13.45–14.45)

Susie Dent is best-known for her long-standing role as resident lexicographer and etymologist on Channel 4’s Countdown and also appears on the show's comedy sister 8 out of 10 Cats Does Countdown.

Susie comments regularly about words in the news on TV and radio. She has contributed to discussions on, among others, Radio 4's Woman's Hour, 15 x 15, Saturday Live, More or Less, and Today.

Susie regularly delivers key-note speeches to both small companies and major corporations on language and communication. She also helps businesses gain a new appreciation for the effectiveness of personal and business communication. Her mission is to help companies understand that words matter and finding a way to meaningfully communicate will ensure lasting results. 

 

 

 

Rosalind Rossouw, Chair of the Life Conference Committee 2022, welcomes you to this year's conference. We look forward to welcoming you back!  Please note this is an in-person conference only. 

If you have any questions, please email Niki Park or Danielle Wyld

Registration Wed, 23/11/2022 - 16:30 - 18:00 Registration and Exhibition
Plenary session Wed, 23/11/2022 - 18:00 - 18:15 Welcome to the Life Conference 2022
Plenary session Wed, 23/11/2022 - 18:15 - 18:30 Matt Saker's update on his Presidential year

Matt has 30 years’ experience working as an actuary in the life and general insurance industry.  After a long career at Watson Wyatt, Matt joined Aviva in 2009 where he held the role of Group Chief Actuary until January 2022.  Matt’s responsibilities in this role covered all aspects of the Group’s actuarial methodology in respect of both Life and General Insurance. In addition, Matt led the development of data science and the embedding of climate risk within Aviva’s Risk management Framework.  Matt plays an active role in the UK actuarial profession and was elected to the Council of the Institute & Faculty of Actuaries (IFoA) in 2016, before joining the Regulation Board in 2018. More recently Matt has been closely involved in the profession’s response to climate change, the development of the IFoA’s Diversity, Equity & Inclusion strategy, and became President in June 2022.

Plenary session Wed, 23/11/2022 - 18:30 - 19:30 Plenary 1: Sustainable Pathways – A critical pathway for a manageable future for humanity

Sir David King outlines the actions humanity needs to take to stabilise our climate and provide a foundation for a prosperous future for humanity. The talk will cover the Climate Crisis Advisory Group’s recommendations that recognise the need to reduce emissions, remove GHGs from the atmosphere and also repair the Earth’s natural carbon cycles. Climate action needs to further recognise nature as an important ally, embed justice and equity as central tenets and take action to adapt to the changing climate we will face, with further warming locked in till 2050. The talk will also cover the application of actuarial risk management techniques to the climate problem as well as the role and responsibility that actuaries have to positively impact climate change.

Refreshments Wed, 23/11/2022 - 19:30 - 21:30 Drinks Reception and Dinner
Registration Thu, 24/11/2022 - 08:00 - 08:30 Registration
Plenary session Thu, 24/11/2022 - 08:30 - 09:30 Plenary 2: Stress Event Resilience – A case study on the Inflation Shock of 2022

The non-transient inflation shock of 2021-2022, harking back to economic and political instability of the 1970’s, is a major challenge for economies, financial institutions and consumers.  In particular life insurance companies who need to deliver on policy promises to millions of policyholders will be challenged. This challenge will be to meet the benefit expectations of their policyholders, as well as to control cost inflation and protect shareholder values. 

This presentation will evaluate the 2020-2024 time frame of this stress event and what actuaries did, should or could have done to ensure their stakeholders have a plan to be resilient against such events.  The presentation will cover the issues and impacts on:

  • Investment portfolios
  • Investment guarantees in savings and annuity products
  • Asset-liability matching
  • Adequacy of policy benefits
  • Insurer solvency and profitability

The presenters cover a wide range of angles on the topic within the life insurance space:

Rebecca Mac Donald, Hymans Robertson

Su Siew, Aviva

Colin Dutkiewicz, Aon

David Chen, Just

Ree Chen 

They are all members of the IFOA Stress Event Resilience Working Party formed to look at improving resilience to stress events across all sectors with a focus on improving consumer outcomes and serving the public interest.

Transfer time Thu, 24/11/2022 - 09:30 - 09:45 Transfer Time
Workshop Thu, 24/11/2022 - 09:45 - 10:35 Workshop Session A

A1: IFRS 17: It is here, but will we make it?

A1: IFRS 17: It is here, but will we make it?

With 2022 being the IFRS 17 comparative year, the Financial Reporting Group (FRG) of the IFOA will provide:

  • An update on latest developments and implications from the IASB's Interpretation Committee.
  • Details of the timeline and expectations for IFRS 17 reporting and KPI.
  • A summary of IFRS 17 disclosures to date and market reaction.
  • Views on what lies ahead for insurers to first formal IFRS 17 reporting in 2023.
  • A summary of the UK and International support to actuaries working on IFRS 17.

Speakers from the FRG: Anthony Coughlan (PwC) and Kamran Foroughi (WTW)


A2: Funded reinsurance and the impact on the Pension Risk Transfer market

The use of funded reinsurance (reinsurance that transfers asset risk as well as demographic risk) has accelerated in recent years in the pension risk transfer market. Chris Anderson (PRT Consulting Lead) and Kenny Cheng (Life Insurance Capital Lead) from EY will discuss how this reinsurance works, how it is being used in the market, the benefits and risks for firms entering into these transactions and the possible future trajectory of this type of reinsurance including implications of Solvency II reform. Kunal Sood (Head of Reinsurance and Structuring at The Phoenix Group) will discuss how The Phoenix Group thinks about risk management for PRT transactions and how the use of funded reinsurance fits into their overall strategy.

Speakers: Chris Anderson and Kenny Cheng, EY, Kunal Sood, The Phoenix Group


A3: Case Study: Get ahead of the Game - How to optimise your MA Portfolio

Most life insurers have so far considered ‘optimisation’ of matching adjustment (MA) portfolios mainly in the context of increasing investment in illiquid assets or restructuring assets that are not outright eligible. So far little work has been done on using mathematical optimisation for allocation of assets to the matching adjustment or portfolio construction purposes. In this talk, we share our insights as to how mathematical programming has benefited some insurers in managing their matching adjustment portfolios, including:

  • Determining optimal asset allocation for a given set of constraints including the PRA MA tests with different objectives such as to maximise the MA or improve cashflow matching, with a run time of few seconds enables them to run thousands of scenarios.
  • Automated management actions such as trading-in and trading-out assets to restore compliance with the MA regulatory requirements under stress.
  • Overall outcome has been not only optimisation of the MA portfolio, but also a notable acceleration of the working day timetable.

Speakers: Sheikh Yasir and Ramesh Indran, 4most Europe


A4: Update from the CMI

This session will provide an overview of recent outputs from the CMI, with a particular focus on:

The recent analysis, by the Annuities Committee, of mortality and long-term care experience of equity release mortgage holders

 Hot topics from the Mortality Projections Committee, including:

  • Recent mortality
  • Results from our Benchmarking survey
  • Initial impact of the 2021 census results
  • Looking ahead to 2023

Speakers: Matthew Edwards, WTW and Jamie Funnell, Pension Insurance Corporation


A5: Consumer Duty - What does it mean for actuaries

The Financial Conduct Authority have consulted twice on their proposed Consumer Duty and final rules are expected at the end of July 2022, with firms expected to comply during 2023.  

The requirements are far reaching and are likely to require a higher level of thought, governance and evidence than the previous rules on treating customers fairly.

This talk will look at the impact of the Consumer Duty on the role of actuaries, focussing on the 4 outcomes of 

  • Products and services
  • Price and value
  • Consumer understanding
  • Consumer support

The talk will explore:

  • How it might impact product pricing, product design and customer communications
  • The use of data that will likely be required to fulfil the evidencing requirements
  • Specific requirements for products such as With Profits.

Speakers: Karen Brolly and Siobhan Lough, Hymans Robertson


A6: Improving your portfolio through court approved legal mechanisms

Court approved legal mechanisms, such as Part VII transfers and Schemes of Arrangement, are important tools that insurers can use for improving their portfolios in areas such as balance sheet optimization and expense reductions.  They can also be a powerful tool for making wider changes such as amending benefits, for example in converting with-profits business to non-profit business.

This talk will look at the  at the future and wider use of Court approved legal mechanisms from both a legal and an actuarial point of view.

Topics covered will include:

Recent developments in Part VII transfer schemes and Schemes of Arrangements

What does the landscape look like post the end Brexit transfers?

Schemes as a tool for capital optimization, simplifying with-profits portfolios and effecting transfers of business – what can, can’t you do?

Future changes to Solvency II in the UK – what might that mean for Schemes?

Speakers: Philip Simpson, Milliman and Hammad Akhtar, Pinsent Masons


A7: Practical insights into Life Insurer Climate Change Risk Management

Following a review of publicly available information in 2021, the Life Climate Change Working Party conducted a detailed survey of UK and European life insurers in H1 2022, digging into the detail of how firms were managing climate change risks across our four workstreams of risk frameworks, asset risks, liability risks and reporting.  This talk will present the findings of the survey plus summaries of the resultant deep dives into key areas of uncertainty and lack of uniformity of approaches identified in the survey.  We aim to provide participants with practical tips and examples gleaned from the industry to help them with their climate change risk management.

Speakers: Scott Eason, Barnett Waddingham, Adel Drew, Milliman, Andrew Kitchen, Royal London, Rajinder Poonian and Craig Follows, M&G


A8: Quantitative tools for emission reductions in the investment portfolio

Since 2018, the efforts of insurers towards sustainable investing have accelerated – initially disorganized and more recently framed by numerous regulatory initiatives from the PRA, EIOPA and the European Commission. In the first part of this presentation, we will look into the major regulatory changes that affect assets in particular (European taxonomy, Green asset ratio) and regulatory capital (climate stress test, capital charges).

Most insurers have already integrated sustainability in their investment strategy (implementation of exclusion lists, target ESG rating, carbon emission reduction targets for their portfolio). Nevertheless, more work needs to be done on managing ESG criteria holistically at balance level as well as when defining the strategic asset allocation. We will propose a quantitative framework for constructing indices reflecting the insurer's objectives and allowing them to build their allocation strategy by integrating ESG criteria globally.

We will also see that in order to achieve the carbon reduction objectives, insurers will need to make changes to their portfolio; leading to accounting implications as well as profit-sharing to policyholders. Given these constraints, we will review different solutions available in the market.

Speaker: Gareth Haslip, J,P, Morgan Asset Management


A9: Uncertainty abounds! – Asset allocation in the current environment 

After years of disruption, government finances have unsurprisingly come under pressure, but few expected this level of exacerbation from inflation. What can history tell us about investing in a high-inflation environment? How does stagflation influence this thinking? Can we learn from different regional perspectives? Japan, for example, is one of the few countries in the world that welcomes inflation.

Through our previous work [see references], we had anticipated increased political disruption. This has now accelerated, with sanctions and capital market volatility adding pressure to both sides of life insurance balance sheetsQ What is the interplay between political and economic forces, and how can they be factored into asset allocation?

These decisions are further complicated by growing tensions between the real economy and our natural environment. The challenge has been centuries in the making, but remedial action will have to be far faster to avoid its worst physical and financial impacts.

In this presentation, we discuss the asset classes to consider in this complex and uncertain environment, how scenario analysis might help deal with ‘known unknowns’, ways to think about ‘unknown unknowns’, and how planning for net zero requires flexibility – because decarbonisation will not follow a straight line.

Speaker: Lesley-Ann Morgan, Schroders

Refreshments Thu, 24/11/2022 - 10:35 - 11:15 Morning Refreshments and Exhibition
Transfer time Thu, 24/11/2022 - 11:15 - 11:20 Transfer Time
Workshop Thu, 24/11/2022 - 11:20 - 12:10 Workshop Session B

B1: Divorce and Remarriage - A Tale of Two With-Profits Funds

  • The controversial 2001 AXA reattribution split the former Equity & Law With-Profits Fund in two and divided up its inherited estate
  • The resulting New and Old With-Profits Funds have in 2022 been re-merged
  • This presentation tells the story of these funds, including:
    • The reattribution
    • The distribution of the inherited estate
    • The merger
    • The outcomes for customers in each fund and for shareholders
    • The safeguards and fairness considerations
  • It also considers potential lessons for the future 

Speakers: Somerset Lowry and Darren Thorne, Aviva


B2: Evolving the longevity risk transfer market

Financial instruments for hedging interest rates and inflation are common, easily tradable and used to great effect by insurers and pension plans in their risk management frameworks.

However, the current options for hedging longevity risk are more limited with no liquid and efficient market for trading.

In this session we will explore technological and actuarial innovations in longevity risk management that will open up the longevity risk market, develop new and efficient hedging options an create a wide array of new opportunities.

Attendees will learn about:

  • A longevity risk market update including: the emerging capacity constraints in the longevity risk market; the explosion in new reinsurance entities looking to off-load longevity risk; the creation of the first digital longevity risk market place
  • Methods for defining and quantifying different types of longevity risk
  • Differences in longevity risk between different populations
  • How best to create hedging products that minimize basis risk for different underlying populations
  • New product designs for hedging specific types of longevity risk (including practical examples for new direct to pension plan products and back book management)
  • How the wide adoption of such products can create a liquid and efficient market for longevity risk

Speaker: Steven Baxter, Club Vita, Monique Groen, VB Risk Advisory and David Schrager, Longitude Exchange


B3: Evolving how products meet consumer needs through retirement

The Modelling Innovative Pre and Post Retirement Products working party has recently published the first part of two planned reports that summarises the current state of play of the retirement market and potential solutions that merit further attentions. This session aims to run through some of the main items in the report and provide an update on the follow up work of the working party, in particular looking at

- How different products can meet the needs of individuals at different stages of retirement, based on how spending patterns change through retirement

- Preliminary modelling results illustrating how successfully different combinations of solutions will meet different individual needs; covering drawdown, annuities, equity release and longevity pooling

- An update on post retirement innovation from outside the UK 

- Key challenges to implementing innovative solutions in this space

Speakers: Esther Hawley, Barnett Waddingham and Clarence Er, Leadenhall Capital Partners


B4: Model Risk: Driving change in insurance

This session will cover the latest thinking on model risk management drawing on experience of implementing Model Risk Frameworks.  It will cover:

  • What models should be in scope (including those beyond the scope of actuarial and finance teams)
  • What control standards insurers are implementing and how these could differ by materiality and purpose of the model
  • The role of validation and how Solvency II standards can be adapted to wider models
  • Lessons learnt from model risk in banks and the PRA approach (including its 2022 consultation)    **
  • What insurers might be able to learn from the experience in banks
  • How model risk management interacts with wider risk management such as IT controls and Operational Risk processes
  • How model risk can be reported and monitored

Speaker: Matthew Murphy and Adam Tan KPMG


B5: Remote risk protection in Global Life and Health insurance market

What does Lutsk, Snoop Dog and tax changes all have in common?  They are all highly specialised risks to life and health insurance companies requiring protection.  From war coverage (Lutsk) to musicians (Snoop Dog) and mass lapse events (tax changes), life and health insurers have a plethora of risks that they are exposed to every day – some risks they want to take and some they don’t.  

 This presentation will cover a number of facets of life and health insurer risk protection:

  • Specialist life coverage
  • Pandemic protection
  • War coverage
  • Terror modelling and protection
  • Lapse risk management

 I will provide relevant UK and international examples, it will focus on the global trends in these remote and exotic risk taking.

Speaker: Colin Dutkiewicz, Aon


B6: Climate reporting - Phoenix's commitment to action

An overview on what insurers need to be doing to align with the TCFD (Task Force on Climate-related Financial Disclosures) recommendations, presenting Phoenix Group's TCFD journey to bring this to life. The session will share insight into Phoenix's experience over the last 2 years, as well as practical tips and lessons learnt across the key TCFD recommendations of Governance, Strategy, Risk Management, Metrics and Targets. Finally we will look at what leading TCFD disclosure looks like within the market and consider what is next for the industry.

Speakers: Rachel Watson, PwC and Leah Ramoutar, The Phoenix Group    


B7: A Looming Threat? Understanding the Human Cost of Rising Temperatures.

The need to quantify the financial risks posed by a changing climate is growing, and there is limited understanding of how the liability side of a life insurer’s balance sheet may be impacted. We have spent time investigating temperature effects on mortality, and the presentation will share the method and findings, as well as highlight the need for further work in the space. The talk will cover:

  • Existing scientific research into how temperature affects mortality (in both extreme heat and extreme cold events)
  • How this research was leveraged to build an actuarial model to predict the mortality impact of climate change
  • Emerging patterns in mortality as temperature rises, and how this might be of interest to insurance companies who sell or hold protection or annuity products
  • Why further investigations into liability-side exposure are needed and how improved data availability across the industry would enhance comprehension and mitigation

Speakers: Daniel Gill and Alexander Harding, 4most


B8: Thriving through change with our actuarial outsourcing partners

Summary

Covid 19, IFRS 17, a new administration system and Brexit were the backdrop to an international insurer outsourcing their UK actuarial reporting function to an actuarial consultancy over 2020-2021.  This joint presentation covers the practical aspects of the transformation project including the challenges encountered.  Insights from the first year of operation and the development of IFRS 17 as part of the outsourced service will also be covered.

More detail:

Background

  • The UK and non-UK reporting requirements covered by the project.
  • The outsourcing structure.
  • Transforming the technology landscape and leveraging greater automation.

Challenges and Business As Usual Insights 

  • Covid 19 and how to handle new ways of working.
  • Challenges from a multi-year implementation of a new administration system.

 IFRS 17

  • IFRS 17 development.
  • Opening balance sheet and performing Q1 and Q2 2022 dual reporting.
  • Embedding IFRS 1

Speakers: Michael Edwards, Sun Life Financial of Canada, Ashley McMillan and Rizwan Sami, WTW

Refreshments Thu, 24/11/2022 - 12:10 - 13:20 Lunch and Exhibition
Workshop Thu, 24/11/2022 - 13:20 - 13:25 Transfer Time
Plenary session Thu, 24/11/2022 - 13:25 - 14:25 Plenary 3:Professional Skills - When Life gets tough

Actuarial work isn't known for being easy. There have been, and will continue to be, many new developments;  technical, regulatory, and consumer issues throughout your career. How do you keep on top of these and remain professional at all times? Whose responsibility is it?  What can you do if it goes wrong or you think you aren't getting the support you would like?

The session will include a new, not yet published, video for discussion, suggestions on how the IFoA may be able to help, and ample opportunity for interaction  

The session will be led by members of the IFoA's Professional Skills Sub-Committee: Malcolm Slee and Jane Hamilton.

Transfer time Thu, 24/11/2022 - 14:25 - 14:30 Transfer Time
Workshop Thu, 24/11/2022 - 14:30 - 15:20 Workshop Session C

C1: With Profits:  In terminal decline or ripe for resurgence?

This session will be a panel discussion with senior practitioners.

The session will seek to answer key questions regarding the future of With-Profits, such as

  • What does the future of With-Profits business look like in the UK?
  • Is With-Profits in terminal decline? And is run-off inevitable?
  • Do (with-profits) actuaries have a responsibility to revitalise it?
  • Is With-Profits ripe for resurgence? Can the industry sustain with-profits in the longer term through product innovation?
  • What developments might we expect in the next decade?
  • Would a period of higher future interest rates mean for the future of with-profits business?
  • How does with-profits fit into a digital world where customers want up to date information all the time but rates are reviewed periodically and so there can be step changes?
  • Will future supply meet demand for with-profits expertise?

This promises to be an engaging, topical and interesting discussion, led by some of the industry’s most experienced senior with-profits practitioners.

Speakers: Stewart Gracie, Wesleyan, Andrew Hague, NFU Mutual, Brian Murray, Royal London and Alasdair Smith, Scottish Widows
Chair: Dan Diggins, Hymans Robertson


C2: The transfer market

The concept of the “transfer value” of liabilities has been baked into the Solvency II regime from the outset, but this has been thrust further into the limelight in the face of prospective reforms to the UK’s post-Brexit interpretation of the rule.

Drawing on their experience of BPA pricing and insurance M&A, experts from Deloitte and NatWest Markets will consider:

  • What a transfer value is, how it could be determined, and the elements that impact it, including rates, spreads, size of capital requirements and buffers, and a look forward to how the concept may change when books / firms find themselves in run-off.
  • The extent to which a transfer value may not have a unique definition.
  • What this means for UK life insurers and what may lie ahead for the industry.

Speakers: James Gillespie, NatWest Markets and Brandon Choong, Deloitte


C3: Automating Reporting - From Model Output to Submitting the QRTs, with (nearly) no spreadsheets

The session presents a case-study of transformative process re-engineering for a major life insurer. The company was facing the challenge of meeting greater financial reporting demands including from IFRS 17 and dual Solvency II reporting due to Brexit. Like many other companies, it had identified the need to improve its reporting process to the right of the actuarial models which relied on the use of many of spreadsheets and all the issues this typically brings.

 Traditionally, the choice was often between the manual, spreadsheet-based process, and a data warehouse. The latter usually requiring a huge investment and developments often taking many years.

The transformation we undertook provided a novel approach to this challenge, providing the strong automation and control required without the price tag of a full data warehouse. In this presentation, we will describe how we went about this, some of the insights we gained, and the lessons learnt.

Speakers: Patrick Penzler and Tom Beasley, WTW and David Houston, Aegon UK


C4: Insuring Today's Diversity

Emerald Life was set up in 2016 by Steve Wardlaw to promote equality in the insurance sector for ‘under-served and underinsured’ sectors of the population, in particular women and the LGBT+ community. They work with underwriters to change policy wording, inform rating procedures and improve customer experience for their existing range of products which are predominantly non-life. They have a vision to expand their offering and provide life/protection cover, but feel there is work to do to promote this, particularly for those living with HIV and trans customers.

I work for an actuarial consultancy in the smaller mutuals sector, and was introduced to Steve in 2020. Our aim is to highlight some of those issues around trans and HIV, increase actuaries’ understanding, and to encourage/enable the fair pricing of some of these risks, making life insurance more accessible to this community.

Speakers: Cara Spinks, OAC and Steve Wardlaw, Emerald Life


C5: Shareholder Value: Leveraging public data for insights

  • The presentation will explore how publicly available data (i.e. from SFCRs, QRTs, investor presentations and annual reports) may be used to develop useful valuation (i.e. point in time) and capital generation metrics (i.e. change in value over time).
  • The presentation assumes a basic knowledge of Solvency II, and the metrics discussed are derived primarily using data from the Solvency II balance sheet.
  • The presentation will discuss how various metrics can be used to provide useful insights on the topics of Shareholder Value, capital generation and return, and M&A/transaction pricing that can be useful to both actuaries and analysts.
  • The presentation will present the results from analysis carried out based on data since the onset of Solvency II.

Speakers: David Burston and Stuart Reynolds, Milliman


C6: Mass Lapse Reinsurance: Making It Stick

In 2021, St James’s Place UK plc entered into a mass lapse reinsurance treaty with Munich Re covering its c.£100bn portfolio of unit-linked business. 

In this talk, those involved in executing the transaction will share practical insights from its implementation from both the insurer’s and reinsurer’s perspectives, covering:

  • considerations around the design of the treaty,
  • ensuring the effectiveness of risk transfer,
  • capital implications,
  • risk management issues,
  • regulatory challenges, and
  • operational considerations.

Speakers: Robert Bugg, Milliman, Paul Fell, St James’s Place and Doug Scott, Munich Re


C7: Climate change, health and longevity risk

From the pandemic to recent extreme weather events, the direct impacts of climate and biodiversity crises are becoming ever more apparent in our lives and on our economy.  Starting with the climate science and the potential economic impacts, this presentation will then consider the implications for morbidity and longevity. 

  • Expected physical impacts of climate change and impacts on the economy
  • New zoonotic and vector-borne diseases and how climate change and the drivers of climate change have increased the risk of these occurring. What are the specific health effects related to exposure to air pollution and the effects of the climate crisis, and what will be the continuing legacy?
  • Forward-looking view on how mortality trends might evolve under climate change, considering both the physical and transition risk elements of climate change and mitigation
  • Reasons for hope - medical advances will improve overall health, for instance, we will better prepared to deal with the impact of heat stress. Global efforts to tackle the climate crisis are also in progress. And finally, we need to recognise that the human species has a remarkable ability to adapt to the environment.

Speakers: Nicola Oliver, Medical Intelligence (London) Limited, Nick Spencer, Gordian Advice


C8: Best practice in integrating climate scenarios in decision-making

So, your company has done its first TCFD report (maybe even its second), what next? What is the emerging best practice in the integration of the insights into the investment decision making process and risk management processes?

From investment beliefs and risk appetite to transition planning, Roelof Coertze (Prudential PLC and Actuaries Carbon Collaboration) and Russ Bowdrey (Ortec Finance and IFoA Sustainability Board Member) will explore the emerging best practice in integrating the results into “so what” and driving change in the risk profile of balance sheets.

Speakers: Russ Bowdrey, Ortec Finance and Reolof Coertze, Prudential

Refreshments Thu, 24/11/2022 - 15:20 - 16:00 Afternoon Refreshments and Exhibition
Transfer time Thu, 24/11/2022 - 16:00 - 16:05 Transfer Time
Workshop Thu, 24/11/2022 - 16:05 - 16:55 Workshop Session D

D1: Bringing your IFRS 17 results to life

IFRS 17 has been a significant investment for insurers across the world. With the effective date almost in sight, insurers are now seeking to understand results from their IFRS 17 calculation engine and disclosed within their financial statements. Such a results analysis framework is critical to aid management understanding and support Board approval. The presentation shares insights and learnings when developing this results analysis framework working with a large global insurer. Key elements include:

  • The level at which results would be analysed across the company's hierarchy, with the level varying at different points on the hierarchy.  One challengewas to develop a framework that was sufficiently agile to meet the needs of both group management and local actuaries within the business units.
  • The types of reasonableness checks and analysis charts needed to ensure the results produced are reasonable. Given that IFRS 17 is a principle based standard, rather than rules based, judgement was required on the appropriate analysis.
  • Determining the appropriate levels of commentaries required to understand the results in the context of a materiality framework. 
  • The technology required to bring together the results from the financial statements to an interactive dashboard whereby users can deep dive into the results.

Speakers: Rakesh Patel, WTW, Linda Kerrigan, Canada Life Assurance Company


D2: New risk transfer tools for life insurers

In 2017, the UK set up an Insurance Special Purpose Vehicle (ISPV) regime through The Risk Transformation Regulations 2017, with a view to making the UK a hub for insurance linked securities (ILS) transactions. There has been very little activity with the notable exception of London Bridge Risk Re set up by Lloyd’s of London. The PRA recently committed to making changes to the ILS regime, aiming to bring greater flexibility and speed to the regulatory approval process.

We will:

- explore how life insurers could use the new regime to access capital from, and transfer risks such as longevity, credit, pandemic and lapse to, third party investors.

- give an overview of the ILS market globally and contrast with more traditional risk mitigation techniques such as reinsurance, derivatives and asset securitisation.

- look at Athene Life Re in Bermuda (part of Apollo Global Management) which set up a sidecar and raised $3bn in third party capital commitments in 2019 to support its life and pensions reinsurance business. In 2020 it used its sidecar to support the reinsurance of a $27 billion in-force block of fixed and indexed annuities from Jackson National Life Insurance Company.

Could UK annuity writers adopt a similar model? 

Speakers: Albert Shamash and James Isden, KPMG


D3: Equity Release and its role in societal change

The session will be delivered by the IFOAs Equity Release Mortgage Working Party.

It will cover the role of Equity Release Mortgages in the current market as well as the systemic drivers that create interesting opportunities for the market going forwards.

The agenda is set out below:

 The current Equity Release market - the traditional consumer as well as investor demand for the product that drives todays market

  • The systemic changes in the social and economic environment that create opportunities for the market
    • Supporting economic growth in the UK
    • Changes to the consumer retirement journey
    • Changes to investor demands, both in the UK and more widely
    • Changes to ESG, in particular climate risk
  • Given each of the above, what role the product can take and the necessary evolution(s) required to capitalise on the opportunity

Speaker: Raj Saundh, EY and Tom Kenny, Just


D4: SII Reforms: The Risk & Compliance View for Life Insurers

The reforms on Solvency II proposed by the HM Treasury promise to overhaul and grow the insurance sector and unlock its potential. Changes proposed to the Risk Margin and Matching Adjustment have the potential to fundamentally alter the investment landscape, and allow for investments in assets not traditionally thought of as belonging to a Matching Adjustment portfolio. On the other hand, the reforms suggest a significant reduction in the Matching Adjustment benefit insurers will be able to take into account.

These changes will have a substantial impact on portfolio management and the way insurers set up their Matching Adjustment portfolios, and introduce wider risk management and compliance considerations around asset portfolio management. 

Our session aims to explore the potential impact on insurers through a series of implementation scenarios and identify how risk management and compliance processes may need to be adapted to allow for the new reforms and reduce any residual risks, while achieving the goals set out by the HMT consultation. We will seek to identify how insurers can set up their portfolios under each scenario and the impact of the reforms on liabilities, capital, and the risk management and compliance processes.

Speakers: Marinos Savvides and Humera Muzammil, Mazars and Andy Morris, Liverpool Victoria


D5: A Practical Guide to Climate Change Risk Management for Actuaries

The IFoA working party have prepared a practical guide to climate change risk management for actuaries.

This workshop will provide an overview of some of the challenges of working in this field and aim to answer the following questions:

  • Why were we inspired to write the guide?
  • Who will find it useful to read?
  • How can the guide be used?
  • What did we find helpful/learn from writing it?
  • What are the risk management challenges around climate change?
  • How does climate impact on a financial institutions value chain? And why do we need to look across all of the value chain? 
  • How do you separate out the impacts from climate on existing risk factors that a firm is already exposed to from a stand-alone climate risk approach – how might the two work together? Is one approach better than the other? Do you need different approaches depending on how you start this?
  • Risk management deep dive on climate modelling risk (exploring a key area where risk management actuaries will lead a lot of the modelling work)
  • How do you get started and stay up to date with understanding climate risks? 

Bringing the discussion to life through case studies and personal experience.

Speaker: Wendy Walford, Legal & General, Caroline Spence, Axa Insurance, Roelof Coertze, Prudential and Mayukh Gayen, Hymans Robertson


D6: The good, the bad and the ugly of data science

This session explores real life case studies of data science, considering where they have worked well and where they have failed to deliver on their potential, and why some projects just turned ugly.  

The presenters will draw on their international experience in the insurance industry (using personal experience for the good examples!), but will also look at wider areas across other industries. The session will cover an example use of gradient boosting machines to predict longevity, considering the advantages and disadvantages gained from advanced analytics techniques compared to more traditional approaches.

Detailed knowledge of advanced analytic techniques is not required – this session will be of interest to potential users of analytic investigations as well as analysts themselves.

Speaker: Alastair Black, WTW and Rachael McNaughton, WTW


D7: Emerging challenges for with-profits funds

Recently, there have been a number of key themes arising in the challenges being faced, and actions being taken, by insurers managing with-profits funds. This session will cover these challenges, as well as some emerging challenges that should be considered, including:

  • Annual bonuses – considering increases in annual bonus rates with the uptick in interest rates and inflation.
  • High inflation, “post-pandemic” environment – challenges include higher surrender rates and reduced new business volumes, the impact on expenses and possible changes to investment strategy.
  • Smoothing practices – simplifying smoothing practices while still providing a smoothed return to with-profits customers.
  • FCA’s consumer duty rules – additional actions required to comply with the FCA’s consumer duty rules.
  • Goneaways – ensuring there is a good understanding of goneaway populations through robust tracing efforts, as well as methodologies to distribute the remaining unclaimed assets.
  • With-profits processes and governance – simplifying with-profits management processes, with the aim of reducing time spent on “business as usual” tasks, and allowing time for strategic decisions.
  • Whole of life payouts – considering approaches for determining terminal bonus rates with endowments having largely run off.

Speakers: Jennifer van der Ree, Sarah Walker and John Jenkins, Milliman


D8: Potential implications of a changing world

The world changes everyday and in recent times this statement seems truer than ever:

  • after years of operating in a low-interest rate environment, insurers must respond to rising inflation and increases to the Bank of England base rate;
  • policyholders and potential customers face a cost-of-living crisis which is expected to impact sales and lapse rates; and
  • the government has set a precedent by imposing a windfall tax on energy firms which could affect investments held in these and similar industries.

On top of this, insurers, their customers and shareholders or members are exposed to an ever-changing regulatory environment highlighted by the expected reforms to Solvency II and plans to introduce Sustainability Disclosure Requirements.

In this presentation, we explore the potential implications of these issues and other political, social and economic changes facing the life insurance sector today and in the future.

Speakers: Debbie MacDonald and Cath Gavin, Grant Thornton

Transfer time Thu, 24/11/2022 - 16:55 - 17:00 Transfer Time
Workshop Thu, 24/11/2022 - 17:00 - 17:50 Workshop Session E

E1: IFRS 17 and investor stories: this Global EY survey explores changes to KPIs under IFRS 17 and recommends actions insurers should take now

Companies are in the midst of producing the IFRS 17 Opening Balance sheet numbers and communicating these to the market.

We will provide insight on how companies are thinking about their KPIs and Investor Story, building on our recent Global KPI survey and analysis of disclosures to date.

Speakers: Brian Edey and Rachel Cromarty, EY


E2: CANCELLED


E3: CANCELLED


E4: Mutuality – its relevance to society today & why actuaries should care

Mutuality has received a lot of press coverage recently, particularly in light of the proposed LV=/Bain Capital deal. This presentation we will cover the mutuals’ landscape, their values and history, as well as international comparisons. We will discuss the current challenges facing mutuals as well as the opportunities and their continued relevance going forward.  

Speakers: Hirish Ragoo, Grant Thornton and Martin Shaw, Association of Financial Mutuals


E5: Portfolio Temperature – What is it and how do we take it?

The Life Insurance industry, as a large institutional investor, is expected to play a key role in the transition towards a ‘green economy’. Many companies set climate targets, but it hard for their stakeholders to understand which global warming scenario the company is actually aligned to.

Yet, how can an institutional investor “take the temperature” of their portfolio – that is to say, convert numerous data, assumptions, and model results into a single temperature score – the temperature rise scenario their portfolio is aligned to.

In our talk, we will introduce a few degree warming metrics and discuss the practical challenges of estimating portfolio alignment. Firstly, we will consider several data challenges such as the need to take Scope 3 emissions into account. Secondly, we will discuss the key expert judgements involved in this work – for example, whether absolute emission targets or emission intensity targets should be considered. Thirdly, we will examine how future emissions can be projected, e.g. by using machine learning methods. Finally, we will discuss how to calculate the degree warming metrics for several asset classes such as sovereign bonds or property and how to aggregate the results across an asset portfolio.

Speakers: Corina Constantinescu, University of Liverpool, Michael Leitschkis, Milliman and Abdal Chaudhry, Barnett-Waddingham


E6: Modelling of impact of climate change

Climate risk is difficult to model due to:

  • Multivariate nature
  • New risk so there is a lack of historical data
  • Uncertainty

Causal modelling is well suited to modelling these types of problems as the emphasis is on the causal links and interactions between risk drivers and outcomes. These causal links can change over time and the model can be expanded as new information becomes evident. This stands in contrast against more traditional approaches that are static with a focus on outcomes alone. As a result, you could end up with a model that does not adapt to real world scenarios quick enough.

This presentation will demonstrate the use of causal modelling for analysing complex risks such as climate related risk to drive better business insight.

Speakers: Tatiana Egoshina and Adel Drew, Milliman


E7: Leveraging health data in the intelligent automation of underwriting

Unpacking the opportunity that life insurers have by leveraging health and wellness data in making better underwriting and pricing decisions, in a more automated and real time way. Referencing experience gained from working with leading insurers that have successfully tapped into the digital world that connects the behaviour of individuals with their wellbeing, and ultimately insured risk. Allowing for a more individualised approach to making critical business decisions when issuing new policies and assessing claims.

Speakers: Lee Kuyper and Simon Spurr, Alula Health


E8: The Inflation Genie

The inflation genie is out of its bottle, and policymakers and politicians are scrabbling around to get it back in! But:

  • What are the pertinent, market-influencing factors that pension schemes look at as they progress their de-risking journeys?
  • What happens - from a hedging perspective - at the point at which a BPA transaction takes place? 
  • What are the implications of current conditions for the market going forwards?

Speaker: Luke Andrews and Suanne Chong, NatWest Markets

Other Thu, 24/11/2022 - 17:50 - 19:45 Free Time
Workshop Thu, 24/11/2022 - 18:00 - 18:50 Optional Workshop(s)

Funeral plans:  The dawning of the new regulatory age in the UK

Since 29 July 2022, funeral plans have been regulated by the FCA, and consumers have been afforded added protections from the Financial Services Compensation Scheme and Financial Ombudsman Service.  All funeral plans have had to prove their financial strength and have incurred extra one-off and annual costs.  Some have not survived.

 Uniquely, funeral plan providers that are backed by a trust, as opposed to a life insurance policy, must publish their Solvency Assessment Report on their website.

The focus of this session is to:

  • Explain the unique aspects of funeral plans,
  • Explore the impacts of the new regulations and consumer protections, and to
  • Glean best practices from the now publicly available Solvency Assessment Reports.

Speakers: Erika Parker, OAC Plc and Alan Marshall, IFoA


Creating transformative change in your organisation

Have you ever wondered how to introduce change and encourage a culture of continuous improvement within your organisation?  In this talk, we will discuss just that.  The session will focus on three key areas:

  • Real-life case studies from the industry – to give you some examples of transformative changes made by actuaries to large organisations, along with some tips and tricks to influence strategy, explore and implement new technology and really make a difference
  • A view on the “operating model of the future” – including some views on how IT, Change and Finance functions can better work together to support strategic change and improve BAU processes
  • Innovation insights – we will discuss our own experiences in developing a team of technology-enabled actuaries within our organisation, and how we go about developing and supporting a culture of continuous improvement and innovation

Speakers: Ed Bujok-Stone and Sian Walker, EY


Synopsis - HMT Review of Solvency II: Consultation Response

On 17 November, HMT published the response to its consultation on “Review of Solvency II”.

In this session I will:

  • Summarise the content of this long-awaited response.
  • Drill down into some of the key areas of uncertainty that remain.
  • Provide our initial thoughts as to how these areas might develop in the future.

Speaker: Graham Cornish, Grant Thornton

Refreshments Thu, 24/11/2022 - 19:45 - 20:15 Drinks Reception
Workshop Thu, 24/11/2022 - 20:15 - 23:30 Conference Dinner and after dinner speaker - Simon Reeve

Simon Reeve is a TV presenter and bestselling author with a passion for wildlife, history, current affairs and the environment. The presenter of numerous acclaimed Television series, he has travelled extensively in more than 120 countries. His recent book Journeys to Impossible Places: In Life and Every Adventure is a Sunday Times best seller

Workshop Fri, 25/11/2022 - 09:00 - 09:50 Workshop Session F

F1: Applying actuarial concepts to carbon emissions

The Actuaries’ Carbon Collaboration (ACC) is a group of actuaries and other professionals working towards a coherent understanding of the issues around greenhouse gas (GHG) emissions by considering them in an actuarial context.

Emissions into and absorption from the atmosphere can be modelled in the same way that we model variable cash flows, including the impacts of uncertain quantities and timing. The ACC’s work investigates both the insights that this analogy provides and its limitations. The talk will explore the use of Markov chains, stochastic visualisation tools and impacts on the risk discount rates in modelling GHG emissions.

Please note: The three presenters will represent the Actuaries' Carbon Collaboration, and not their employers.

Speakers: Kateryna Katyukha, Louise Pryor and Roelof Coertze


F2: What work/life balance? A different approach to managing time & energy

 In the hybrid-working world, many of us are finding the lines between work and home life becoming more blurred than ever before, exacerbating the challenges around work/life balance. 

Although during the pandemic we have become used to the ever increasing overlap, disruptions and interruptions between our personal and professional lives. Many of us recognise that this is not only reducing our effectiveness in all areas, it is also having a negative impact on our wellbeing. Our pre-COVID approaches simply no longer work and it is time for a different approach.

In this interactive workshop we will explore simple but effective approaches to creating clear boundaries, moving effectively between tasks and managing the sense of overwhelm that many of us too often feel. You will leave with a refreshed approach to redefining and living your own work/life balance.

Speakers: Jen Goddard, Soulfire Coaching Limited and Sarae Pratt, Sarae Pratt Women's Leadership Coaching & Training


F3: Social Care Reform: The financial implications and insured solutions

From October 2023, the government will introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime. The social care working party will discuss the financial implication on individuals and local authorities and explore potential insurance solutions in response to this reform.

The scope of our proposed talk includes:

  • Introduction and comparison of the new social care reform, Dilnot proposal and the current system with case studies on individuals’ progression to care under different financial circumstances and care needs
  • Explore if any objective methodology of calculating care needs has been implemented, and whether actuaries can assist in developing a standardised and quantitative assessment of multiple degrees of care needs
  • Discuss the advantages and challenges on different proxies to quantify care needs, such as cost of care or number of care hours required
  • Analysis of the financial impact and the unmet needs of individuals from the new cap and the mean tested system
  • Explore potential insurance solutions including equity release, investment bonds or innovative public and private insurance schemes complementing the reform
  • Research on the potential consumer behaviour impacts
  • Research into how care is funded in other countries

Speakers: Tom Kenny, Just, Fiona Fan, RGA and Mohamed Elsheemy, NHS England


F4: What is the future for the pooling of risk?

Pooling of risk has historically been at the core of insurance and pensions. Recent trends however have seen an increased focus on individuals – from the use of more individual underwriting factors for insurance, and the move to defined contribution pensions. This session will consider how much value we still place on pooling of risk, what risks should society look to pool, and how can the actuarial profession affect this. We will consider what recent trends mean for customer fairness, including the impact of increased data analytics usage. What are the implications for future product design – what further underwriting factors could be introduced for life insurance? how do we manage catastrophe risk? is there a future for with-profits funds, defined benefit pensions and other pooled savings vehicles?

Speaker: Matthew Edwards, WTW


F5: Insurers role in Nature Based Solutions for carbon capture and storage

Sustainability is a key trend for all insurers, with a number of life insurers having committed to having net zero investment portfolios by 2050 or before. Alongside net zero commitments, insurers are increasingly attempting to account for their impact on Biodiversity, with the Taskforce for Nature-related Financial Disclosures expected to launch their disclosure framework in 2023. Carbon removal is expected to form a key part of a net zero economy, with the IPCC saying the use of carbon removal is now “unavoidable” if the world is to reach net zero by 2050. There are a number of solutions for carbon removal and insurers as large scale long term investors could play an important role in scaling up these solutions.

 In this talk, the speakers will cover:

  • Introduction to carbon removals
  • Different options for carbon removals and how they compare
  • Specific examples of Nature Based Solutions for carbon removal
  • Potential financing mechanisms to scale up NBS

Speakers: Charlie Beard and Rebecca Lewis, Deloitte, Tim McGrath, WWT


F6: International Sustainability Standards Board – Evolving reporting

Insurers are continuing to develop their Sustainability related disclosures, dealing with the increasing granularity expected of Task Force on Climate-Related Financial Disclosures (TCFD) aligned disclosures. The next challenges include  compliance with the IFRS’s International Sustainability Standards Board (ISSB) sustainability and climate related disclosures, and with Task Force on Nature-Related Financial Disclosures (TNFD). In this talk we will:

 

  • Outline the differences between TCFD/TNFD and ISSB
  • Summarise feedback from the ISSB on the exposure draft consultation
  • Highlight key areas that will impact the insurance industry

Speakers: James Mercer, Deloitte and Ben Carr, Aviva


F7: Supporting the retirement journeys of the future

The retirement market is still adapting to a post pension freedoms world.

Using data from our recent consumer survey, we will explore what retirees are looking for and what they are still struggling with.

We will consider the regulation that is adapting to help shape the market and the decision-making process that retirees are faced with.  This will cover recent FCA and TPR initiatives and their impacts as well as looking at what more could still be changed to help.

We will also look at product innovation and how the market and product providers could develop new products and tools to help with retirement journeys.  This will include a look at property wealth to explore if a form of equity release could provide an additional way to maximise income in retirement.

Speakers: Karen Brolly and Kirsten Wilkie, Hymans Robertson


F8: Ground Rents as a Key Asset Class for Institutional Investors

A high proportion of the UK’s overall ground rent income is used by pensions and insurance companies to fund Defined Benefit pension liabilities and future life insurance claims respectively.

Yet ground rents remains a relatively unknown asset class to most, with many people only knowing about ground rents through being leaseholders and therefore having to pay ground rent in their personal capacity. 

We will set out the background, features and rationale for ground rents as an asset class in this presentation, with an institutional investor co-presenting and setting out their view of why this asset class is very appropriate for helping to meet the liability challenge of defined benefit liabilities. 

 [Please note: we are currently working with three institutional owners of ground rents and are still finalising which one of them will co-present]

Speaker: Marc Loh, FTI Consulting and Jack Spearman, Longharbour Ltd

Transfer time Fri, 25/11/2022 - 09:50 - 10:00 Transfer Time
Workshop Fri, 25/11/2022 - 10:00 - 10:50 Workshop Session G

G1: Demographic impacts for insurers of the cost-of-living crisis

High inflation has the potential to significantly erode the discretionary spending power of new and existing customers of insurance companies.

We consider the impact of energy price rises and inflation of food, fuel and other prices to assess the reduction in discretionary income for different groups of consumers and the potential impact on life insurance products: lapses, conversions to paid-up status, withdrawals from savings products and reduced propensity of consumers to purchase new policies. 

We also consider whether we might expect to see any mortality impact of the cost-of-living crisis due to cold homes in an average and an extreme winter scenario for 2022/23.

Speakers: Richard Marshall and Sam Wilders, WTW


G2: Solvency II Reforms

The objectives of the review of UK Solvency II are respectable and ambitious, but are we on the right path to realising them? Over April to July 2022 a comprehensive package of reforms from HM Treasury shaping the future of UK prudential regulation has been consulted upon.

We will share findings from our analysis of the reforms proposed in the April 2022 consultation and the likely direction of travel.  Changes in the risk margin and matching adjustment have important implications for product pricing, capital management, reinsurance, internal models and many other areas.  We will cover both technical and political perspectives.

We expect the following delegate learning outcome/experience:

  • Set out the review objectives and describe the events leading up to the review and the envisaged next steps, ensuring up-to-date knowledge of these important developments to allow delegates to form opinions and reflect on their preparedness.
  • Describe the main areas of tension and debate in the review, focusing on the methodology and calibration underlying the matching adjustment, to encourage discussion and further reflection among delegates.
  • Share results of our analysis based on a large sample of UK life insurers so that delegates can see the estimated effects at an industry level.

Speakers: Kenneth McIvor and Anthony Plotnek, WTW


G3: Capital management and performance overview – Global banks

This presentation will provide an overview of the capital management strategies and key drivers of performance of global banks across North America and Europe, drawing parallels to the life insurance sector and highlighting any particular learning points. Aspects covered will include:

  • Why do so many global banks still have market values below their book value?
  • Which characteristics distinguish the better performing banks?
  • How do their capital management strategies compare?
  • What are the parallels / learning points for life insurance?

Speakers: Phillip Olivier and Miles Kennedy, Deloitte


G4: Achieving sustainable leadership: leading without burnout

A third of financial services workers state levels of burnout have increased in the post-pandemic, hybrid-working world. This can particularly impact those with leadership responsibilities both in work and at home, and those who identify within minority groups.

In order to create sustainability in our leadership mindset, behaviours and actions, we need to look inwards at our own personal needs and our energy management and also understand how to role model working without personal sacrifice.

In this interactive workshop we will explore how, as actuaries and leaders, we can create ways of identifying and honouring our needs, as well as gaining greater self awareness of our automatic responses. Together these support ourselves and our teams to both work and live at our full potential without burnout.

Speakers: Jen Goddard, Soulfire Coaching Limited and Sarae Pratt, Sarae Pratt Women's Leadership Coaching & Training


G5: Cancelled


G6: The war against your own brain - cognitive biases and climate change

As regulation and general cultural trends head towards a net-zero world, this raises the question of why some companies and investors may be slower to react than others. 

Your brain has a predisposition to perceive information through a filter of personal experience and preferences and therefore ‘rational’ decisions may be overlooked for more familiar or automatic thinking. In the context of climate change this means that we may have some bizarre reactions to the risks we face and the solutions we adopt. 

In our talk, we will explore:

  • the underpinning psychology;
  • how identifying biases can facilitate the journey to net-zero;
  • some examples of the unusual reactions to the climate crisis
  • approaches for challenging these biases, both internally, with clients and with consumers; and
  • how the actuarial profession can provide stewardship in this area.

 A link to a blog we have written on this topic can be found https://www.hymans.co.uk/insights/blogs/blog/cognitive-bias-as-a-barrier...

Speakers: Nicola Kenyon and Scott McGruther Johnson, Hymans Robertson


G7: Climate Scenarios & ORSA – putting the theory into practice

Climate risk is a rapidly evolving space, where regulatory and business requirements are accelerating. One of the tools insurers can use to assess the potential impacts of risks and investigate different optimization strategies is the Own Risk and Solvency Assessment (ORSA).

To include climate scenario analysis in the ORSA, insurers and pensions funds need coherent, and transparent scenarios which allow them to quantify the financial impact from physical and transition risks. A series of additional modelling are required to use a set of standard scenarios such as those produced by the Network for Greening the Financial System (NGFS) to assess the impact on your asset and liability valuations. Energy and climate variables must be converted into macroeconomic effects, and then into financial market variables such as interest rates, inflation, and asset class returns. Technology costs and fiscal responses to climate shocks and carbon prices can further impact the overall results. While the NGFS scenarios may appear to have only a limited number of narratives, the total universe of possible outcomes is much larger when each of these assumptions is considered.

In this interactive session we will discuss:

  • The regulatory environment and recent changes
  • Features of the published scenarios
  • Methodology for translating scenarios into model inputs
  • Challenges incorporating climate scenario analysis into the ORSA

Speakers: Cassandra Hannibal and Gavin Conn, Moody’s


G8: Implications of the new Consumer Duty rules for in-force business

The FCA will have published its Consumer Duty regulations shortly before the Life Conference. While most focus has been on the sale side (ie new business), there may be substantial implications for in-force books, especially business such as with-profits with a discretionary element. In this session, we look at what impacts are expected for with-profits funds as well as unit-linked funds. Will more transparency on investment allocation and the rationale for that allocation be required, for instance? Will this lead to a new wave of product simplification and fund mergers, as insurers find solutions that improve outcomes for both the consumer and the insurer? What do actuaries need to do?

Speaker: Trevor Fannin, WTW and Andrew Ruddle, FCA

Refreshments Fri, 25/11/2022 - 10:50 - 11:30 Morning Refreshments and Exhibition
Transfer time Fri, 25/11/2022 - 11:30 - 11:35 Transfer Time
Workshop Fri, 25/11/2022 - 11:35 - 12:25 Workshop Session H

H1: Management of closed with-profits funds

Are with-profits funds awake to the risks of run-off? 

The Management of closed with-profits funds working party will present the findings of their research into how firms manage with-profits funds in run-off, including the use or reliance on sunset clauses, capital management and run-off plans. The session will consider a range of risks facing funds and how the availability of capital support, corporate structure and materiality of the risks interact. The working party will share their insights into perceived good practice, discuss where different approaches or tools may be appropriate (or not) for other firms to consider, and highlight possible blind spots for actuaries working in with-profits. 

Speakers: Ben Stroud, EY, Dan Diggins, Hymans Robertson and Sally Butters, OAC


H2: Is now the right time to enter the UK bulk annuity market?

There is continued and significant interest from a wide range of parties in the UK pension risk transfer (bulk annuity) market - but how easy is it to enter that market and what are the possible routes to doing so?

In this session, Nick Ford and Richard Wellard will discuss the hurdles faced by insurers, reinsurers, asset managers and private equity firms in attempting to enter and succeed in this market.

Nick will bring his experience of advising numerous parties on entry to, and continued success, in the market. Richard will bring his experience of dealing with the pension schemes themselves - what do they look for when considering transferring risk to insurers and how do they view new entrants?

Clearly a key area of consideration will be the impacts of changes to Solvency II regulation. Other topics to be covered may include potential vehicles, roadmaps for investment strategy and regulatory capital, ESG considerations and operational aspects.

Speaker: Nick Ford and Richard Wellard, Hymans Robertson


H3: Professionalism Session: Facing New World Challenges

The last couple of years have seen major changes to where and how actuaries work and consequently changes in how we interact with our customers, clients and colleagues.

There have been new challenges of isolation, communication, company loyalty, conflicts and many others.

Many of these changes will continue to some extent going forward as many of us adapt to a hybrid working environment.

Throughout all this it is imperative we remain professional in all we do.

What additional aspects do we need to consider to achieve this?  How can the IFoA’s Regulatory approach, in particular recent changes to the Practising Certificates regime, support members in their endeavours to provide the best service to the users of actuarial work? 

This will be a lively interactive workshop led by Malcolm Slee, Chair of the IFoA’s Professional Skills Sub-committee and a representative from the IFoA’s General Counsel Team, where we consider these issues with the aid of a video case study and other material. 

(The session includes content presented at the IFoA’s June Conference.)

Speaker: Malcolm Slee, IFoA's Professional Skills Sub-Committee and Emma Gilpin, Head of Regulatory Policy


H4: Credit risk modelling – the perpetual challenge

Credit risk modelling continues to persist as a focus area for most long-term UK life insurers. As the size of illiquid asset portfolios continue to grow, we also witness the increase in the diversity of credit-risky assets on insurance balance sheets. This trend is set to continue, with the changing picture around interest rates and other macroeconomic factors as well as the prospective impacts from Solvency II reforms all potentially contributing to this.

There is a continuous need for development of methods to model credit risk to determine the capital required to be held for these assets and to support the management of these assets. As with any development also comes increasing regulatory scrutiny. Credit risk modelling remains a challenge; the need to capture and appropriately model all risks retained from new assets as well as the lack of market standards creates problems for the industry.

 Drawing on key findings from the Deloitte Credit Risk Survey and the speakers’ practical experience, this session will present:

  • Key themes emerging on credit risk modelling of different assets
  • The regulatory challenge and potential avenues for navigating this
  • A forward-looking view of how credit risk modelling might evolve

Speakers: Gabriela Baumgartner and Karam Singh, Deloitte


H5: DE&I - What, Why, Who, and How. Working together to deliver change.

  • What is DE&I
  • An introduction to each of diversity, equity and inclusion including an awareness of cognitive diversity
  • An overview of the current diversity within the UK as a whole and comparing this to the actuarial profession
  • Why DE&I is important
  • Overview of the joint DE&I discussion paper issued by the PRA, FAC and BoE paper
  • Important DE&I statistics from the IFoA DAG, insurance industry and UK census setting out why society and the profession need to act to keep up with societal changes
  • Who should be driving DE&I
  • Awareness of historically who has been driving DE&I in insurance
  • How EQ will play an increasing role in lives of the ‘actuary of the future’
  • How can we make DE&I better in the actuarial profession
  • Summary of the new IFoA DE&I strategy and industry DE&I initiatives
  • Thoughts on how the profession and industry need to work together and the power of collaboration
  • Challenges around implementing DE&I strategies, such as working internationally
  • Guidance on what YOU can do and where to go to get involved

Speakers: Christopher Cullen, EY and Toby Moseley, IFoA


H6: Can funded reinsurance transform your balance sheet?

CANCELLED 


H7: ESG in Fixed Income: Mis-managing climate risk and Paris mis-alignment

ESG has become a very important issue for insurers, driven by regulatory requirements and increasing customer pressures.  Climate change is a key focus and carbon outputs, net zero and Paris alignment are all metrics that insurers could seek to manage.  However what are the shortcomings with these metrics and how can insurers manage their fixed income portfolios to be more ESG aware and make a difference in the real world, not just on their balance sheets?

Simon & Joshay will explain some of the ESG metrics used and look at some of the practical complexities for an insurer’s assets. They will also look at the importance of engagement with issuers and how this can make a real world difference.

Learning outcomes:

Attendees will learn about the key metrics in relation to ESG and climate change for a fixed income portfolio, and how these might evolve over time.  They will also understand the trade-off between immediate, isolated action and more proactive engagement with issuers.

Speakers: Simon Richards and Joshay Harkoo, Insight Investments


H8: Maximising M&A outcomes

Against a backdrop of continued M&A activity across Europe, maximising outcomes for policyholders, shareholders and society is at the forefront of all parties' agendas and remains a balancing act.

The speakers from Fenchurch Advisory Partners and PwC will draw on their combined perspectives to discuss:

  • The current deals landscape; 
  • Emerging trends; and
  • Deal optimisation for all stakeholders.

Speakers: Stephen Harrison, PwC, Chris Deville and Yiannis Kourris, Fenchurch Advisory Partners

Refreshments Fri, 25/11/2022 - 12:25 - 13:35 Lunch and Exhibition
Transfer time Fri, 25/11/2022 - 13:35 - 13:45 Transfer Time
Plenary session Fri, 25/11/2022 - 13:45 - 14:45 Plenary 4: The Accidental History of Communication

I’ll be talking about how language often evolves through mistakes and the decisions of single individuals, and that English is particularly messy and gnarly but also beautiful. Its history is studded with secret stories of words that were once misunderstood or deliberately changed, and of bold decisions by single individuals who changed language forever. The history of communication has been equally bumpy, but rather than strive for perfection we can focus on what matters and avoid overthinking it. If we embrace the changes and the messiness, we can create something both influential and lasting.

Speaker: Susie Dent

Plenary session Fri, 25/11/2022 - 14:45 - 15:00 Closing Remarks