Risk and Investment Conference 2018

Further programme details to follow.

Speakers: Malcolm Slee and Judith Joy, Institute and Faculty of Actuaries

Marjorie Ngwenya, President, Institute and Faculty of Actuaries will be giving her Presidential address at the beginning of the dinner. 

After dinner speaker: Dame Frances Cairncross

Frances Cairncross is one of the UK’s most respected economic commentators.

Being a member of staff for The Guardian from 1973 until 1984, Cairncross draws on a wealth of experience as a journalist. Prior to working at The Guardian, Cairncross spent periods of time on the financial staff at The Times, The Bankeras well as The Observer.

Cairncross spent twenty years on the staff of The Economist; most recently as management editor. Additionally to this, Cairncross chaired the Economic and Social Research Council between 2001 and 2007 and was also president of the British Science Association – a highly prestigious position to hold.

Cairncross’ book, The Company of the Future, was published in 2002 by Havard Business School Press. In march of 2003, Cairncross won the Institute of Interal Auditors annual award for business and management journalism. Cairncross has multiple books in economy and global communications, her other book, The Death of Distance studies deeply into the social and economic effects of the global communications revolution.

It was first published in 1997 and was later re-published, in a new edition in 2001.

In 2004, Cairncross became the Rector of Exeter College, Oxford, a role in which she relinquished ten years later, in 2014. As well as this, Cairncross is a non-executive director of Stramongate Ltd, and a presenter of BBC Radio 4‘s Analysis programme. A truly inspirational person, Cairncross also held the honorary post of High Sheriff of Greater London.

Amlan Roy will be presenting a version of his speech to senior policy makers and officials from 73 countries at the World Bank Exec Forum in Washington DC.

Speaker: Amlan Roy

A1: InsurTech: How do Insurers Assess the Risks and Opportunities?

Insurers are investing significant amounts of time and money in developing and acquiring new InsurTech solutions, to enhance their propositions and help maintain a competitive advantage. But how are insurers assessing the risks from investing in InsurTech? The IFoA Risk Management in a Digital World Working Party will present a summary of a forthcoming report, covering the results of an industry survey and guidelines for the consideration of risk at appropriate stages of the InsurTech innovation journey.  The intention of the guidelines is to facilitate the decision making processes, making them more efficient and effective, rather than inadvertently stifling innovation.

Speakers: Daniel Bruce,Crowe Horwath and speaker TBC

A2: Recovery and Resolution Planning

• We will share our experience of building a recovery and resolution framework
• Recovery – the escape plan for future events that could threaten a firm's viability
• Resolution – if there’s no escape, how to achieve orderly failure
• Challenges faced and learning gained
• The value of what was created
• No prior knowledge of recovery and resolution is needed
• Understanding of insurance solvency requirements will be helpful

Speakers: Peter Telford and Serena Soong, Legal & General Assurance Society and James Claxton, EY

A3: Hedging Inflation-Indexed Liabilities: RPI versus CPI/CPI-H

Following recent statutory changes a portion of RPI linked pension liabilities now increase in line with CPI. The presentation will cover the impact of this change and how insurance companies and pension funds can hedge this new inflation exposure. We will discuss sources of supply of CPI/CPI-H linkage both current and future (including possible issuance from the DMO). We will also cover the CPI-H index and the implications of a further change in statutory revaluation.

Speakers: Udit Kapoor, HSBC and speaker TBC

A4: Water, Water, Everywhere...

Investors seeking to boost returns without taking incremental credit risk have for many years sought more illiquid investment opportunities that can be held to maturity backing annuities or other CDI (cash flow-driven investment) strategies.

Conversely, the need to hold liquid assets creates a yield drag, more prevalent in a world of Central Clearing, CRD IV, Matching Adjustment and an increasingly illiquid domestic credit market.

Here, NWM explore the actions investors can take to optimise their liquidity management, enabling firms to focus on holding even greater proportions of illiquid assets, exploring overseas investment opportunities and working their liquid assets harder.

Speakers: Andrew Kenyon and Srihari Srivathsa, Natwest Markets

Climate change is one of major challenges of our time. The need for pension funds to take account of the risks posed by this challenge is front of mind for legislators and regulators. We’ve seen:

• recent reports from the Bank of England and Green Finance Taskforce;
• changes in guidance from the Pensions Regulator; and
• the parliamentary Environmental Audit Committee writing to pension funds referencing the IFoA’s Risk Alert on climate change.

The actuarial profession has much to offer when helping stakeholders understand and consider the potential impacts of climate-related risks. Our multi-disciplinary panel will explore the specific role of actuaries, and their employers and clients, in addressing climate change and the associated risks.

Panellists: Daniel Wiseman, Client Earth, Simon Howard, Chief Executive, UK Sustainable Investment and Finance Association and more TBC

Russell Gill will provide an insightful view of working as an actuary in a less traditional area. Based on his own experience he will share his thoughts on the challenges to actuaries expanding their horizons and his thoughts on how these might be overcome. He will also draw on the new actuarial risk principles framework and illustrate how his actuarial training has been useful in his role as Head of Modelling & Pension Risk at Nationwide Building Society.

Speaker: Russell Gill, Nationwide

B1: Building Operational Risk Resilience 

The presentation will cover:

• A "typical" operational risk scenario analysis
• A refined view of operational risk scenario analysis
• What you gain from the refined approach
• Operational resilience

Speaker: Lloyd Richards and Maddie Betts, Crowe Horwath

B2: Home Equity Release Modelling: Valuation and Risk Management

The presentation will cover:

• Residential property price modelling for ER valuation and risk management
• Looking at different assumptions for valuing ER assets (risk neutral valuation, RW other)
• Some considerations for matching adjustment eligibility
• Stress and scenario testing for ER assets

Speakers: Harry Hibbert, Moody's and Steve Sunderland, Aviva

B3: Can Non Life Insurers Generate better Investment Returns?

The presentation will cover:

• A backdrop to the current macro-economic environment
• Why insurers should consider reviewing their investment strategy
• Key considerations:
  • Overview of Strategy Setting including risk/return objectives
  • Setting a strategic Asset Allocation framework
  • Liquidity, operational & currency considerations
  • Asset managers – guidelines, asset classes, sizing and approaches
  • Market Timing
  • Liability / regulatory / currency / operational considerations

Speakers: Sam Tufts, Richard Wilson and Ryan Allison, EY

B4: The Coming Age of "Peak LDI"

Liability Driven Investment has been one of the dominant trends in UK DB pension investment in the past 15 years.

But given the high level of hedging now in place, we present analysis suggesting that the current pace of new hedges can only continue until 2021 at the latest. 

We believe the UK is now transitioning into the Age of Peak LDI - where schemes will only increase hedging at the margin or in an opportunistic manner.

We then look at what impact this abrupt change could have on both gilt yields and scheme funding levels.

Speakers: Paul Fulcher and Richard Boardman, Nomura and Jon Hatchett, Hymans

There is almost no research on the psychology behind the decision-making of pension fund trustees. Our research investigates the behavioural biases that affect trustees’ investment decisions. We first present a comprehensive review of adjacent research in psychology, behavioural finance, and decision-making, to better understand how these biases may lead to sub-optimal trustee choices. Next, we present the results of our empirical research to date. Last, we discuss further avenues of exploration, including remedies to improve decision-making.

Speakers: Leonardo Cohen and Peter Ayton, City University and Iain Clacher, Leeds University