General Insurance Article - Lawyers highlight new profit streams for corporate insurers


Corporate insurers could tap into new profit streams this year if they are prepared to consider an interesting niche opportunity which is served by only a very small number of insurers and receives little attention, lawyers suggested today.

 In 2018 record numbers of trustees transitioned their pension liabilities to bulk annuity life insurers (buy-in and buy-out volumes reportedly reaching £18 billion by the end of the year) and analysts predict continuing (some say exponential) growth of this trend moving forward.

 But specialist pension lawyers at ARC point out that trustee responsibilities don’t end there, creating a niche opportunity for corporate insurers to underwrite the residual liabilities for member claims which may arise in the years after the scheme is wound up. As the bulk annuity insurers become less keen to write cover for some of these risks (especially for smaller schemes), so there is scope for growth in this insurance market for corporate insurers as trustees and sponsors begin to understand these risks and pay more attention to the levels of cover needed.
 
 Not all trustees and employers are as aware of the post winding-up risks presented by pension schemes after they have transitioned to the bulk annuity insurers and the insurance community will need to spend time educating them, but trustees and employers ignore the risks at their peril, because the risks of a pension scheme do not end on winding-up. Once the assets have been used to secure the benefits, the costs of dealing with post wind-up issues fall to the trustees themselves and often the sponsoring employers (which can come as a surprise to those who think a winding-up ends the exposure completely).
 
 ARC partner Jane Kola explains where the gaps are that need cover: “No matter how much work the last trustees do before winding-up, they cannot eliminate the risk of all poor past decisions, misunderstandings of rules and pensions law which impact on benefits (like poorly handled deeds, misunderstandings on equalisation and discrimination issues), incorrect benefits due to duff data and the claims of those who have dropped off the members list but retain pension rights in the scheme which they claim later.”
 
 This niche market promises some excellent business opportunities for corporate insurers and lawyers suggest they consider it as they make their plans for the year ahead.
  

Back to Index


Similar News to this Story

Parents suffer at work for caring for sick children
New research from MetLife UK shows parents are paying the price for taking time off work to look after sick or injured children in the shape of extra
Whats your holiday nightmare event
Some people travel to soak up the culture, sample the food and bond with the locals, but the UK’s travellers responding to a new survey from global tr
Non life insurers holding more non traditional investments
New research from insurance and investment advisory firm LCP shows significant and growing appetite from non-life insurers for non-traditional investm

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.