Life - Articles - Hard choices ahead for UK Life insurers says new report


 Standard & Poor's Ratings Services today published a report discussing its view of the ongoing regulatory changes in the U.K. life insurance market (see "U.K. Life Insurers Face Hard Choices As Low Interest Rates Coincide With Widespread Regulatory Reform"). In our view, these require a strategic response from all players, even the market leaders. At the same time, continued macroeconomic uncertainty serves to constrain the margin for error.
 
 In our view, the insurers in the U.K. life sector that we expect to maintain or enhance their credit strength after the regulatory changes will be those with a broad distribution and product base that is not reliant on commission. In addition, those insurers that have access to the market via a number of routes or whose customers have already made the cultural transition to paying for advice will likely gain most from the changes under the Retail Distribution Review. The insurers that can extract value from auto-enrolment will be those that are able to retain and select schemes without weakening their profitability and those that can exploit the opportunity to sell a broader suite of benefits. Overall, a dip in new life sales appears likely over 2013 and 2014 as the market readjusts.
  
 Across the industry, capitalization remains robust and has benefitted from significant reductions in risk. Furthermore, we consider the balance sheets of the U.K. life sector to be liquid. Most liabilities to which shareholders are exposed are long-dated, and illiquid. These liabilities are, in general, matched with highly liquid and highly rated bonds.
  
 To read the full report, "U.K. Life Insurers Face Hard Choices As Low Interest Rates Coincide With Widespread Regulatory Reform", please click here.

Back to Index


Similar News to this Story

IPT receipts hit over GBP1 billion in November 2024
According to this morning’s HMRC data, Insurance Premium Tax (IPT) receipts reached £1.2 billion in November 2024, bringing the eight-month 2024/25 to
Healthy life expectancy data hint at post pandemic recovery
New figures published last week by ONS show Healthy Life Expectancy for younger age groups is lower than a decade ago although older ages have seen a
Treatments through PMI hit record in first half of the year
Over seven in 10 of all private health treatments are now being funded via PMI. Record H1 in 2024 for PMI-funded health admissions as employers expand

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.