Use of PPOs
In the case of a lump sum award for a personal injury claim, the claimant is essentially asked to take responsibility for investment, inflation and longevity risk, ensuring they properly invest and manage this often very large sum of money, whilst also budgeting appropriately so that the money does not run out before they die. Awarding a PPO is an effective way to stop the individual from having to shoulder these risks, and instead placing them with the insurer (or the NHS in the case of clinical negligence claims).
The IFoA has been engaging with policymakers to explore a policy approach that considers a PPO as the preferred settlement option. A lump sum should only be considered when the claimant, or their advisers, can demonstrate they fully understand the risks of not accepting a PPO and that a lump sum is more appropriate for their needs.
Download IFoA's briefing to MPs for the Civil Liability Bill.
Recent Developments with the Discount Rate
In February 2017 the then Lord Chancellor announced a dramatic reduction in the discount rate for personal injury claims, from 2.5% to minus 0.75%. Subsequent to this, the Ministry of Justice (MoJ) has consulted on how future changes to the discount rate used for the calculation of lump sum should be determined. The IFoA responded to the consultation and were invited to give oral evidence to the Justice Committee on the setting of the rate, and other related issues. IFoA messaging around the discount rate included our support of the use of periodical payment orders (PPOs) as a more appropriate way to compensate to catastrophically injured.
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Events calendar
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Insurers’ hidden risk from reinsurance recaptures; the perspective of UK annuity writers
29 June 2022There is a lack of publicly available information covering the practices insurers employ to manage their exposure to reinsurance recapture risk. A working party was set-up to shed light on the different approaches insurers use to mitigate this complicated to manage risk. This report is intended to form part of a publicly available information repository that market practitioners can refer to and reflect on as best practice evolves and develops.
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Climate Solvency The Actuaries Carbon Collaboration: Applying Actuarial Concepts to Carbon Emissions
6 July 2022The 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.
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Sessional Meeting: Data and Modelling Considerations for mental health in life insurance
11 July 2022This talk presents the work of the Data and Modelling workstream of the IFoA Mental Health Working Party. We explore data and modelling considerations in the risk assessment and underwriting of mental health conditions. We will also consider how newer risk factors and improved data availability might open up opportunities for additional underwriting and product designs.
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Pensions Dashboards
12 July 2022As the industry prepares for Pensions Dashboards, we have lined up a specialist panel who is at the heart of the ongoing work in this area. Hear the latest developments, future proposals and have the opportunity to put forward your questions to our speakers.
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Applying AI – From Concept to Practice
19 July 2022Artificial Intelligence is heralded as a game-changer to the ways industries use data, with the insurance industry especially looking to embrace these new technologies. This brings many questions – not least around data privacy, ethics, potential biases and so on – with regulators increasingly interested in developments.
Moreover, whilst the stunning progress of specific technologies such as Watson and Alphazero made headlines some years ago, current commercial applications of AI remain far from mature.
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This webinar will cover:
• Some background on the risks of misselling in an ESG context, including the DWS case
• Achieving positive impact is a strong antidote to the risks of greenwashing or ESG misselling, however this risks having a tension with fiduciary responsibilities
• This tension can be resolved with a concept called Universal Ownership
• Under Universal ownership, investors have an appetite to make a loss in order to achieve positive impact, and yet still have no compromise on their fiduciary responsibilities
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This session will focus on the transformation roadmap of the healthcare sector in KSA and the role of actuarial capabilities in enhancing its evolution to the desired end stage as per the objectives of the Vision 2030. The discussion will focus how the system has evolved so far and shed light on the expected future changes. Through examining the transformation, we will highlight how the sector is and can use actuarial expertise to not only assist with this transformation but also use basic actuarial principles to identify the key risks and their respective mitigation strategies.
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Sessional Meeting: Covid-19 and the Effectiveness of ERM Frameworks
Online15 August 2022The purpose of this research paper is to explore enterprise risk management lessons which can be learnt from the Covid-19 pandemic in preparation for potential future pandemics as well as other “gray rhino” or “black swan” events. This paper is not intended to be an all-encompassing solution to the issues presented by Covid-19; rather, the content has been provided to help drive discussions regarding how risk management processes may need to evolve in line with the dynamic nature of the underlying risks that they sometimes need to capture.
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The IFoA's Infrastructure Working Party, led by Chris Lewin, will present its new introductory guide to infrastructure investment, which will be published on the IFoA web-site prior to the webinar. Those readers whose institutions have already taken the plunge into infrastructure will know that it is a highly complex and diverse field of activity. This guide does not explore all the matters which investors take into account, but it does discuss many of the more important points, including the risks and past returns, benchmarking, and ESG and SDG considerations. Attendees will be invi
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Health – Our Greatest Asset
2 November 2022Health contributes to happiness at the personal, family, community and societal level. Health, importantly underpins all our economic security. This talk will explore the drivers of our health, the measurement of health and the steps we can take to improve health – most of which lie outside the NHS.