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Driving the Sustainability Challenge in Claims

Join us for this MGAA Market Briefing delivered by Sedgwick. The session is delivered by Ian Gibb, National Technical Manager who explores how climate change has a direct impact on the insurance sector and reviews how taking a systems approach has real benefits to driving a more sustainable claim solutions. At the end of the session, participants will be able to: Explain how climate change has a direct impact on the insurance sector. Outline the importance of taking a systems approach to carbon reduction. List some options to reduce the carbon impact of claims
Posted on Wednesday Mar 26

Four key issues HMRC must fix on IHT in pension proposals

I believe there are four key issues that HMRC need to address in their proposals on how to apply inheritance tax (IHT) to pension benefits. The changes required are so fundamental a further consultation will be needed on the updated proposals to ensure they are practical to implement. On 30 October 2024 the Chancellor announced that IHT would be applied to unused pension assets for deaths on or after 6 April 2027.
Posted on Wednesday Mar 26

IFRS 17 Reporting Update

Fresh analysis from Fitch considers the current state of IFRS 17 reporting, revealing how close – or not – the standard has come to its original objectives of comparability and transparency. The adoption of IFRS 17 has driven significant change across the insurance industry. Despite the new global accounting standard’s goal of enhancing comparability and transparency, compliance has proven complex, with varying interpretations and approaches adopted by carriers across the life and non-life segments.
Posted on Tuesday Mar 25

Tracking risk, people and AI predictions 5 years after COVID

As working from home appears here to stay, effective leaders take a balanced and thoughtful approach to support employee wellbeing and organizational resilience. As business leaders mark the fifth anniversary of COVID-19 lockdowns, they take stock of the post-pandemic impact on people, risk and capital. Boards and senior management teams continue to pursue growth while managing risks and opportunities as they navigate a still increasingly complex world.
Posted on Monday Mar 24

Two thirds of employers embrace responsible pensions

Scottish Widows has revealed that more than two-thirds (69%) of employers in the UK now offer a responsibly invested company pension* - but less than half have it as their default option (44%), which puts the onus on employees to take action if they want to switch. However, Scottish Widows’ Responsibly Invested Pensions Report reveals that nearly two thirds (61%) of employees have no idea how to do that, highlighting a growing need for employers and advisers to educate workers on this issue.
Posted on Thursday Mar 20

Independent Trustee Survey 2025

Barnett Waddingham conducted a survey which reveals exclusive insights into the professional independent trustee (IT) market, offering a firsthand look at what to expect when working with an IT. They received over 220 responses to our survey from a range of individuals including member nominated trustees, company appointed trustees (non-ITs), company representatives and pension managers. What key insights are explored within the report
Posted on Wednesday Mar 19

PLSA Investment Conference 2025

The PLSA investment conference offered new pensions Minister Torsten Bell the perfect opportunity to showcase his determination to promote productive investment with a vision for fewer bigger schemes putting the trillions in UK pension pots to work. Torsten Bell: "We need to pay more attention to returns for Savers rather than just to costs or to savings rates important as both of those are"
Posted on Wednesday Mar 19

The fiscal value of treatment and prevention

LCP Health Analytics was delighted to recently convene a roundtable discussion exploring tractable solutions for aligning incentives around the full value of health. We know that medical interventions – both those that prevent onset of disease and those that effectively control disease preventing complications – have wider value beyond health and direct social care. This includes societal benefit (e.g. net productivity) and government value (e.g. fiscal value).
Posted on Tuesday Mar 18

AI and pensions affecting life expectancy

Since the mid-1800s, U.K. life expectancy has consistently increased despite the occasional shocks from major global pandemics or wars. Since the early 2000s, there has been excellent progress in reducing rates of death attributable to cardiovascular diseases and certain cancers. However, these improvements slowed in the decade leading up to the COVID-19 pandemic and only last year did mortality rates return to the relatively low levels achieved in 2019, just before that pandemic.
Posted on Monday Mar 17

Four ways to optimise your salary sacrifice arrangement

Salary sacrifice schemes, also known as salary exchange, which enable employees to receive some of their pay in the form of a non-cash benefit, have long been used to make employee benefits more affordable for employees. Now, with the average cost of employing someone set to increase by £900 a year due to national insurance increases, schemes ranging from bikes and childcare vouchers to pensions and holiday buy are set to becoming increasingly used.
Posted on Thursday Mar 13

The changing risk that comes with changing cars

Both new and used car sales are growing, according to the latest Society of Motor Manufacturers and Traders (SMMT) data(1) . In all, around 8 million new and used vehicles were bought in the past year. Every time a car is purchased, an insurance quote is sought, and insurance providers will vie for that custom assessment based on their evaluation of the risk. How deep that assessment process goes using data enrichment at the point of quote is up to each insurance provider.
Posted on Wednesday Mar 12

Rising climate risks demand strategies to build resilience

Torolf Hamm from WTW looks at how climate change is amplifying property damage and business interruption exposures, and how companies can better manage the risks and protect their organisation. Climate change is significantly amplifying property damage and business interruption exposures. This is due to the increasing frequency and severity of natural catastrophe events such as floods, wildfires and storms, which are often exacerbated by climate change.
Posted on Tuesday Mar 11

Reverting to the mean every night and day

With credit spreads hitting record lows for the millenium, future returns from IG look pretty thin. But that isn’t the whole story, with at least two other reasons for pessimism: asymmetry and mean reversion. Between ICE, St Louis Fred and Shiller’s interest rates data, we have over 100 years of US BBB spread levels, which allows us to analyse the behaviour of IG spreads.
Posted on Monday Mar 10

Losing weights the planned changes to the CMI Model

The Continuous Mortality Investigation (CMI) has proposed major changes for the next version of its Mortality Projections Model. We supported the CMI with its analysis and decision-making, but this blog reflects our own view rather than the CMI’s. The coronavirus pandemic was a serious challenge to the CMI Mortality Projections Model. A key principle of the model is that recent mortality rates are a good guide to the short-term future. That worked pretty well up to 2019, but the pandemic changed that.
Posted on Friday Mar 7

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