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Turning the Tide can Parametric Insurance Keep the UK Afloat

In the era of big data, using parametric insurance solutions in the UK is increasingly essential. These solutions can expedite payments, ensure adequate coverage and foster long-term resilience. This article considers the advantages and disadvantages of parametric solutions, their current availability in the UK, and the potential future trajectory of the market.
Posted on Thursday Mar 6

Keeping one step ahead of the scammers

Scam communications are nothing new. That tempting offer of an inheritance from overseas that we didn’t know we were due, or a lottery win when no ticket was purchased. But times have changed, and scams are now terrifyingly convincing. A sophistication that has been accelerated by artificial intelligence (AI). The Economist reported this month that investment scammers are using (AI) in a variety of ways to dupe their victims and make their activities more efficient.
Posted on Wednesday Mar 5

2025 and beyond and the impact of LGR on LGPS valuations

Following the publication of the Government’s white paper on 16 December 2024, local government reorganisation (LGR) is proposed for two-tier areas and potentially some existing unitary councils. Devolution proposals include new powers and responsibilities for mayors, including responsibility for Police and Crime Commissioners (PCC), the Fire and Rescue Authority service, and the establishment of new mayoral strategic authorities. In this article, we explore the potential impact of reorganisation on the 2025 valuations, in terms of funding approach and contribution setting.
Posted on Tuesday Mar 4

How AI is transforming actuarial models

Insurance revenues have changed considerably in recent years, due to a combination of evolving economic conditions, regulatory changes, and changing customer behaviour. The growing awareness of personal risk, for example, has led to more interest and uptake in health insurance, with an 11% annual increase in new purchases and a 13% annual growth in existing holders increasing their cover. Yet while there have been more opportunities, there has also been increased competition and fleeting customer loyalty to contend with in the wider insurance industry.
Posted on Monday Mar 3

February 2025 Edition of the Actuarial Post Magazine

In another busy month we saw TPR publish their latest launch their new regime on supervision and regulation of the DC market we also had the FCA open proposals on targeted support reforms for pensions and with inflation rising to 3 percent we also noted the Bank of England giving a Stagflation warning in light of this. Our cover story this month is from Clive Booth a board member of the ESG Foundation asking Has Donald Trump’s Stance on ESG Impacted Its Growth? A Perspective for Actuaries in the Pensions Sector.
Posted on Friday Feb 28

What does Solvency UK mean for GI Internal Models

The UK’s decision to leave the EU in 2016 has impacted our everyday lives, from debates with friends to the effort spent on adapting to the new normal. In the insurance industry, this transition is becoming more evident as the UK implements its own version of Solvency II, which will be known as ‘Solvency UK.’ Solvency II aimed to harmonise EU insurance regulations. Solvency UK aims to tailor these regulations to enhance the UK market’s competitiveness. Interestingly, it is a further shift towards principles-based regulations, transferring more of the onus onto insurers.
Posted on Friday Feb 28

The Gordian knot of growth

The FCA is working at pace to support growth initiatives. From this morning, firms will be able to choose whether to have a Consumer Duty board champion. We cannot rule out other major redress events in the event that systemic breaches of the law emerge, but we are not currently anticipating any further such mass redress events. We also heard concerns around the pace of regulatory change, and are aiming for fewer large-scale changes in our next 5-year strategy.
Posted on Thursday Feb 27

The new Covenant Guidance

The new Covenant Guidance means pension schemes can’t just rely on old guarantees — they need to dig deeper into employer cashflows and long-term resilience. The covenant advisory industry was met with an early Christmas present as the long-anticipated Covenant guidance (the "Guidance") finally landed on 4 December 2024, forming the final part of the jigsaw for the new defined benefit funding regime.
Posted on Wednesday Feb 26

2025 to be another record breaker for risk transfer market

Insurer volumes reach £45bn with recording breaking transactions set to continue in 2025. Large transactions dominate bulk annuity volumes with ten transactions worth more than £1bn. Unprecedented growth for both small and large schemes – the market is truly reflecting scheme of all sizes. The alternative risk transfer market continues to gather pace with another two superfund deals taking place in 2024. New insurers set to grow market with Brookfield Annuity set to enter in 2025, with the majority of insurers regularly quoting on transactions under £100m.
Posted on Tuesday Feb 25

Setting equity return assumptions for DB pension schemes

The assumptions trustees and sponsors of defined benefit (DB) pension schemes make about asset returns are crucial. Overly conservative assumptions may result in higher contributions that unnecessarily burden pension scheme sponsors, while overly optimistic assumptions could lead to contribution reductions that risk of the security of scheme benefits for members.In recent years, the importance of setting equity return assumptions has diminished somewhat.
Posted on Monday Feb 24

How insurers are tackling the illiquid asset challenge

James Fermont discusses how there has been a step-change in insurers’ engagement and willingness to take on illiquid assets from DB schemes —and why this trend is likely to continue. As UK defined benefit (DB) pension scheme funding levels rose significantly following the gilts crisis, many trustees found themselves in the unexpected, but welcome, position of being able to insure their liabilities in full many years ahead of plan.
Posted on Friday Feb 21

Solvency under scrutiny

The topic of solvency has garnered significant attention recently, with the results of a Europe-wide stress test shedding light on insurers’ positions in the bloc; the publication of the UK’s new Solvency regime; and the launch of the Prudential Regulation Authority’s 2025 Life Insurance Stress Test (LIST). For the Europe-wide stress test, participating insurers from the European Economic Area (EEA) were assessed under a hypothetical scenario by the European Insurance and Occupational Pensions Authority (EIOPA)
Posted on Thursday Feb 20

Bitcoin is it currency a store of value or pure speculation

Bitcoin has generated significant interest among investors, institutions, and governments worldwide. While some view it as a potential future currency, others regard it as primarily speculative. This article examines bitcoin’s potential use cases and assesses its long-term value. This article will address the following key questions: Can bitcoin become a globally adopted currency? Could bitcoin become a store of value? Is bitcoin’s price purely speculative? Should institutional investors consider bitcoin?
Posted on Wednesday Feb 19

DB Funding Code and Run on

Pension Playpen video with Hymans Robertson's Laura McLaren and Graham Jones presentation on How the introduction of the Funding Code and run-on debate are impacting approached to funding.
Posted on Tuesday Feb 18

Influential 2025 trends for Property and Casualty insurance

As we enter 2025, the property and casualty (P&C) insurance sector finds itself at a critical crossroads. Mounting challenges, such as climate-driven catastrophes including the devastating Los Angeles wildfires and rapidly evolving customer expectations, are pushing the sector to adapt quickly. At the same time, breakthrough technologies like generative AI (Gen AI) and advanced risk modelling are redefining how insurers assess, price, and mitigate risk.
Posted on Tuesday Feb 18

Key actions for Trustees under TPRs new funding regime

In December 2024, The Pensions Regulator (“TPR”) issued its long-awaited update to its covenant guidance. This update provides insights into TPR’s expectations on how covenant assessments should be undertaken to comply with the new funding regime.As covenant advisers we’ve spent a while getting into the technical aspects of the covenant approaches required in the new regime.
Posted on Monday Feb 17

EIOPAs Prudential Treatment of Sustainability Risks

The European Insurance and Occupational Pensions Authority (EIOPA)’s latest report on the Prudential Treatment of Sustainability Risks marks a significant step in aligning prudential frameworks with sustainability objectives. Focused on transition risks, non-life underwriting impacts, and social risk integration, the report outlines potential changes that could reshape insurers’ balance sheets and capital strategies. Headlining the recommendations is a call for higher capital charges to reflect transition risks in fossil fuel-linked assets:
Posted on Friday Feb 14

Using insurance to add value in fund finance

As both banks and private credit funds step up fund finance activity, insurance could provide crucial competitive advantage. In a fast-growing fund finance market, lenders need agility and capacity to meet demand, while supplementing strong credit risk management. Non-payment insurance, protecting lenders against fund/borrower defaults, could provide many of the answers. An increasing number of fund finance lenders see insurance as a critical enabler of continued and accelerated growth.
Posted on Thursday Feb 13

Strengthening risk governance for sustainable success

Organisational failures like those seen with Carillion, the Post Office or BHS show the vital role of effective risk governance. Beyond avoiding pitfalls, strong governance enables organisations to embrace opportunities and achieve strategic goals. This blog explores how boards can align purpose, strategy and risk management to drive success and prepare for changes to the UK Corporate Governance Code. Good risk governance goes beyond preventing negative outcomes — it empowers organisations to take informed risks and seize opportunities that drive success.
Posted on Wednesday Feb 12

Is Your Customer Data AI Ready

Insurance providers hold billions of pieces of customer data but just how AI ready is that data? There is little doubt the market is on the cusp of a revolution with generative AI and even more emerging technologies allowing insurance to become far more personalised to the individual. It’s been dubbed the ‘personalisation revolution’. This is exciting but the market will only be able to leverage this technology if their customer data is ready.
Posted on Tuesday Feb 11

Putting faith in default funds

We live in a diverse society with many commonalities – one of which is the need to save for retirement. Many people are automatically enrolled into a workplace pension, with contributions invested into a default investment arrangement. In UK defined contribution pension schemes, the default will typically invest in a range of higher risk asset classes when savers are younger, moving to less risky assets as savers get closer to their chosen retirement age.
Posted on Monday Feb 10

Unlocking the potential of IFRS 17

Since its implementation on 1 January 2023, IFRS 17 has transformed the landscape of financial reporting for insurance contracts. Listed companies have now navigated through half-year 2023, full year 2023, and half-year 2024 disclosures, gathering invaluable insights into the financial and operational impacts of this standard. This wealth of experience opens the door for insurers to: enhance operational efficiency; optimise financial outcomes; and consider whether the new information provided by IFRS 17 will lead to any refinement of their strategies.
Posted on Friday Feb 7

The future of asset management with generative AI

In a time of ever-changing technology, generative artificial intelligence (generative AI) has become a key tool in asset management. It is transforming how asset managers analyze data, make decisions, and create portfolios that are finely tuned to the needs of investors. It also improves operational efficiency and expands analytical capabilities. Recent reports, such as the KPMG 2024 Asset Management CEO Outlook(1) and the joint analysis by Oliver Wyman and Morgan Stanley(2), emphasize the strategic significance of generative AI in the industry.
Posted on Thursday Feb 6

Are DB Surpluses a game changer

Pension Playpen discuss DB Surplus and how it can best be used but also about the changes in the Surplus regime could change the way that DB schemes invest. They also discuss how members need protecting and how this all fits in with the broader pensions and policy landscape.
Posted on Wednesday Feb 5

The Role of Cyber Catastrophe Bonds

As firms look to best protect themselves from malicious cyberattacks, we explore the pros and cons of expanding the role of capital markets in increasing the capacity of (re)insurance coverage. We explore the relatively new market for cyber catastrophe bonds, why they are important for the economy, and the potential pitfalls. What is a cyber catastrophe bond? To answer this question, we must first understand a catastrophe bond.
Posted on Wednesday Feb 5