Economics Meta-study with a focus on Financial Services
Lead: Oliver Bettis
Detail: Many actuaries roles require them to be knowledgeable about markets especially during times of crisis. There is value in ensuring that actuaries receive a broad picture of views being expressed on the impact of the COVID-19 pandemic rather than relying on one or two sources. They may however not have the time to gather these views. This workstream will identify a number of macro economists at asset managers, banks, other financial institutions whose economic and market views they would look to follow. The workstream should also express any insights/potential impacts from a life insurance/pension fund/actuarial perspective.
- The economic impacts of COVID-19
Volunteers of the ICAT workstream F&I1 and the Economics MIG have joined forces to produce the following ‘round-up’ of activity which has taken place over the summer.
- The economic impacts of COVID-19: Digest 2
This is the second of regular updates which will be showcased in the ICAT Newsletter which goes out monthly with links on the Economics MIG webpage, so do look out for these.
- The economic impacts of COVID-19: Digest 3
This is the next in the series of regular updates.
Investment impact for Life and Annuity Insurers
Lead: Lizzie Waghorn, Gareth Mee
Detail: Specific evaluation of the impact on current and future direction of life and annuity insurer and reinsurer asset allocation
Outputs: Blog: The Minsky Moment of Fallen Angels Risk
Lawrence Habahbeh, Chair of the Resource & Environment MIG, and member of the COVID-19 action task force on Enterprise risk management and Investment impact for Life and Annuity Insurers, discusses the economic impacts of COVID-19 which demonstrate that, once again, Professor Hyman P Minsky, who long argued that markets were crisis prone, is likely to be proved correct.
Investment impact for Pension Funds (DB)
Lead: Shalin Bhagwan
Detail: Specific evaluation of the impact on current and future direction of defined benefit pension fund asset allocation
- Blog: Impact on Pension Fund Investment Strategy
Shalin Bhagwan, member of the IFoA’s Finance and Investment Board, provides notes for those involved in the stewardship of pension fund investment strategy.
- Capital Market and Economic Assumptions: The potential effect of the pandemic.
Colin Robertson considers such issues and the implications for actuaries in setting capital market and economic assumptions.
The impact of models on investment decisions and procyclicality
Lead: Gareth Mee, Dick Rae
Detail: In an ideal world, insurers, pension schemes and asset managers (on behalf of their investors) can invest through the cycle and do not make knee jerk decisions in a downturn. Action may need to be taken to rebalance portfolios and opportunities may exist to realise value but no-one wants to be a forced seller in the downturn. Sadly, some of the models that we make use of in our industry provoke procyclical behaviour as they show exacerbated falls in solvency (for insurers), unacceptable funding levels (for pension schemes) or poorly planned liquidity protection (for asset managers). We would like to investigate the prevalence of these models and the potential that those in our industry are forced to make poor investment decisions as a result.
- The prevalence of pro-cyclicality in the financial industry
Denis Walsh, Senior Investment Consultant and Insurance Client Segment Leader with Mercer Australia, with input from within the COVID-19 workstream, provides initial observations considering the topic of pro-cyclicality and its prevalence across the financial industry arising from the use of quantitative models.
- The prevalence of pro-cyclicality in the financial industry - Presentation in Actuarial Innovation in the COVID-19 era - May 2021
The Prevalence Of Procyclicality In The Financial Industry- Procyclical Behaviour Through The COVID-19 Crisis - June 2021. Paper by Varun Bajaj, Gareth Mee, Dick Rae, Raj Saundh, Adeline Tan, Pablo Vasquez Lopez, Denis Walsh
Fund Suspensions following Increased Valuation Uncertainty
Lead: Lizzie Waghorn
Detail: A number of authorised property funds have suspended subscriptions and redemptions as a result of Independent Valuers advising they are unable to accurately value a funds properties. The inability to accurately value a funds properties is due to a lack of comparable sales in the market and uncertainty about tenants continued profitability in light of measures introduced to curtail the spread of COVID-19. We would like to understand how insurers and wealth managers are managing such fund suspensions, including the governance process followed and the impact on their customers. This research into suspended funds and company response, will show the latest thinking regarding property valuation and whether Independent Valuers are looking at different valuation methods and to research how such events may impact the future of property and other illiquid funds.
Outputs: Blog: Property: Another COVID-19 Victim
This blog provides an overview of the impact of COVID-19 on open-ended property funds and is aimed at the interested observer within the industry; an understanding of property funds, fund management and insurance is assumed. The views, thoughts, and opinions expressed in this blog belong solely to authors Lizzie Waghorn and David Mitchell of the IFoA's Finance and Investment Board, and do not represent the views, thoughts or opinions of the authors employer or organisation.
Asset class specific
Lead: Gareth Mee
- The impact of Covid-19 on infrastructure debt
This article is authored by members of the IFoA’s Private Credit for insurers working party, and links to the asset class specification work being done as part of the Finance and Investment IFoA Covid-19 Action Taskforce.
- COVID-19 impact on individual assets and balance sheet for Insurers
- The effect of Covid-19 on Private Real Estate Debt
COVID-19 pandemic caused major disruption in the global economy and brought about “the new normal”. In this short article, Private Credit for Insurers Working Party investigates the impact of the pandemic on the CRE debt market and outlook for the future.
Liquidity case study
Lead: Hetal Patel
- Blog: Reviewing your Liquidity Arrangements
Hetal Patel of the IFoA's Finance and Investment Practice Area Board considers the shock to the financial system delivered by the COVID-19 global crisis from the perspective of institutional investment funds.
- Article: Solid Investments
Shalin Bhagwan and Gareth Mee on the benefits and challenges of investing in illiquid assets for defined contribution pension schemes.
Lead: Mahidhara Davangere
Filter or search events
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.
This 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.
As 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.
Crisis management, the process by which an organization deals with a disruptive, sudden and unexpected event that threatens to harm the organization or its stakeholders, has become a key concern in the light of the Pandemic and Geopolitical risks.
Artificial 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.
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
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.
The 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.
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
Health 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.