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The 2025 valuation and what to do with the surplus

Let's cut through the noise and explore the reality behind LGPS fund surpluses, current funding levels, and projections for the 2025 valuation. There’s been a lot of talk about emerging surplus in Local Government Pension Scheme (LGPS) funds - maybe too much talk – with funding levels allegedly ranging from 80% to 200%. With the English and Welsh 2025 valuation fast approaching, now is a good time to look at what’s actually happened since the last valuation on 31 March 2022, the estimated position now, and the outlook for the 2025 valuation.
Posted on Monday Oct 21

CDC for the many not the few

Hot on the heels of the launch of the Royal Mail Collective Defined Contribution (CDC) Scheme, the DWP published its consultation on draft regulations for unconnected multi-employer CDC schemes. This is a crucial step in taking CDC from a potential solution for a few large employers to a means of delivering secure and attractive retirement incomes for everyone else. In a previous article, we described the consequences of risk sharing for members. Trustees, providers, legislators and advisers need to be alive to the potential consequences of benefit design decisions.
Posted on Friday Oct 18

Better retirements start with pension planning today

Mark Twain has been credited with the quote “Never put off till tomorrow what may be done the day after tomorrow just as well”. A saying which often applies to the approach many people take in managing their pensions. Aviva’s Working Lives Report (1) has found that one in five employees choose not to think about their finances even though almost three-quarters of employees (73%) said the cost-of-living crisis has made them feel more anxious about them.
Posted on Thursday Oct 17

Final Day for Nominations for the 2024 Actuarial Post Awards

We would like to announce, that after yet another record number of nominations for the Actuarial Post Awards that today is the final day for nominations. We would like to thank you once again for joining us as we continue to celebrate and reward the talent and achievements of individuals in the actuarial arena. With 8 awards to be won, make your nominations here for your colleagues, employees and team. Celebrating Actuarial talent since 2012.
Posted on Wednesday Oct 16

Personal lines motor and home performance predictions

The UK motor and home markets have had a rough time since the Covid-19 pandemic. A combination of supply chain disruption, high inflation, and labour shortages drove the market to significant losses in 2022/23. The rapid hardening of rates since then has attracted government, media and regulatory scrutiny. Against this backdrop, we have projected expected future market performance for each of UK motor and home business, based on data from firms’ SFCR reporting and using market data collected by the ABI.
Posted on Tuesday Oct 15

Stars of the Future 2024 Nominations Closing today at 9PM

Stars of the Future 2024 nominations are closing today at 9PM. Stars of the Future, recognises the new up and coming talent emerging within the actuarial industry. After nominations close, the candidates with the most nominations are short-listed, voting then opens. All short-listed nominees will be recognised in the Stars of the Future issue of our magazine, out in November. Featuring interviews with the top 3 candidates, and the winner appearing on the front cover.
Posted on Monday Oct 14

CDC a new dawn

In the slow moving world of pensions, the week commencing 7 October 2024 was a big week. On Monday, we saw the launch of the Royal Mail Collective Defined Contribution (CDC) scheme, an event that has been years in the making, and made possible through the single and connected employer legislation in the 2021 Act and 2022 regulations. On Tuesday, the DWP published their much anticipated consultation on draft legislation for unconnected multi-employer whole of life Collective Defined Contribution schemes (I know, catchy).
Posted on Friday Oct 11

AI regulation shaping the future of the insurance industry

James Clark and Chris Halliday look at the EU AI Act, arguably the world's first comprehensive law specifically designed to focus on the regulation of AI systems and its impact on the insurance industry. The regulatory challenge around Artificial Intelligence (AI) is as broad as its potential applications. In response to the scale of the task ahead, the UK government’s white paper ‘A Pro-Innovation Approach to AI Regulation’ published last year deliberately lay emphasis on the themes of fostering and encouraging innovation.
Posted on Thursday Oct 10

Will COVID19 keep excess mortality rates high until 2033

Sergio Jimenez Lopez, Head of Life & Health Research Forecasting, delves into the long-term impact of COVID-19 on excess mortality rates. He explains that despite the pandemic's shift to an endemic phase, COVID-19 continues to be a significant driver of elevated death rates globally. Our latest analysis reveals that estimated excess mortality in 2023 was between 3% to 7% in the US and 5% to 8% in the UK. Sergio outlines two scenarios for the future: an optimistic one predicting a return to pre-pandemic mortality rates by 2028, and a pessimistic one where excess mortality could remain as high as 3% in the US and 2.5% in the UK by 2033.
Posted on Wednesday Oct 9

Why customer service is key in the bulk annuity market

National Customer Service Week (7 – 11 October) is marked by the Institute of Customer Service annually for its members operating across a wide range of sectors, including retail, aviation utilities and financial services. We asked Andy Rose, Head of Pension Services at Pension Insurance Corporation (PIC), why customer service is also so important in the bulk annuity market?
Posted on Tuesday Oct 8

The reserving actuary natural vs artificial intelligence

Why human actuaries still have the upper hand over AI when it comes to the nuanced art of reserving in the insurance industry. Every year, we take in a cohort of graduates and start them off on the basics of actuarial work: reserving. We do this by getting them to set up models based on the previous year’s notes and assumptions. This is neither perfect nor expected to be - the aim is to have the calculations set up to be consistent with the previous year for a more senior actuary to then refine.
Posted on Monday Oct 7

What insurers must know about the hidden risks of silent AI

Anja Vischer, Senior Emerging Risk Manager at Swiss Re Institute, discusses the emerging risks of AI for insurers. She stresses the need to reassess coverage policies due to ambiguous language on AI exposures. As AI evolves, it’s vital for insurers to create policies that specifically address these risks. Policies without explicit AI exclusions may require new costing and risk assessment. Watch the video to get more details.

Posted on Friday Oct 4

Five step approach vital for DB schemes looking to buyout

Insurers may refuse to quote and provide pricing for buy-ins and buy-outs where the DB pension schemes’ data is of a poor quality, warns Hymans Robertson, as it releases its latest paper (1). The firm recommends a five-stage approach – including data audit, cleansing and ongoing management – that schemes should follow to ensure their data is up-to-date and fit for purpose.
Posted on Friday Oct 4

Make your nominations now for the 2024 Actuarial Post Awards

We are pleased to announce that the nominations for the Actuarial Post Awards 2024 are now open! This will be the 12th year of running the awards and each year they become more popular with ever increasing numbers nominated and voted upon. This year we welcome our new sponsor, Pension Insurance Corporation plc (PIC), a specialist insurer of defined benefit pension funds, for sponsoring Actuary of the Year 2024, alongside our long- term sponsor partners Bolton Associates, sponsoring GI Actuary of the Year 2024 and Star Actuarial Futures for sponsoring both Stars of the Future 2024 and Sustainability Actuary of the Year 2024.
Posted on Wednesday Oct 2

September 2024 Edition of the Actuarial Post Magazine

Our cover story comes from Jon Jacobson from Omnisient who looks at applications of Privacy-Preserving Data Collaboration (PPDC) for actuaries. We also have an article from Neil Gunn and Daniel Bannister from WTW reporting on extreme droughts and the growing challenge for global supply chains. In a packed magazine our regular authors tackle subjects, among others, from Sam Marsh from LexisNexis Risk also looking at data and with an article on tapping into the data trinity of quote, history, and claims. Ed Harrison from LCP examines motor and home insurance performance predictions.

Posted on Wednesday Oct 2

Stars of the Future 2024 Nominate Now

You can now nominate someone for Stars of the Future 2024, sponsored by Star Actuarial Futures. It’s vital to remember that we all started somewhere and becoming an actuary is no easy feat. We relish acknowledging the emerging talent within the actuarial market and celebrate the ones to watch with our Stars of the Future Awards. All of the finalists are celebrated and highlighted with three lucky winners taking home an award.
Posted on Monday Sep 30

The DC Future Book 2024

I’m delighted to present this milestone edition of the latest DC Future Book. Since its inaugural publication in 2015, we have proudly sponsored this important work and we are thrilled to continue our support through to this 10th anniversary edition. Produced by the Pensions Policy Institute (PPI), the DC Future Book sets out the current DC landscape in the UK and provides projections for future trends and evidence-based research for policymakers and the broader industry.
Posted on Friday Sep 27

Surprising link of climate change and global security risks

Anna Mejlerö, Senior Emerging Risk Manager at Swiss Re Institute, talks about how climate change threatens global stability, affecting everything from water scarcity to food supplies. Water shortages can cause conflicts, as seen with Spain's recent protests over tourist-driven water depletion. Climate-related disruptions to crop production can increase food prices, leading to social unrest and migration, especially in emerging markets. Mejlerö also discusses the Arctic as a climate-change hotspot affecting global security concerns. Discover how these risks affect insurance policies in our video.
Posted on Thursday Sep 26

What the new funding code means for open DB schemes

Many defined benefit (DB) pension schemes are moving towards an endgame, and schemes open to new entrants are few and far between. In the private sector, fewer than 1 in 20 DB schemes are open to new members, compared with 1 in 10 a decade ago, according to figures from the Pensions Regulator (TPR). The picture is rosier in the public sector, but we’re committed to ensuring open DB schemes in the private sector are not overlooked.
Posted on Thursday Sep 26

Autumn Budget 2024 the Pension sector runners and riders

Autumn Budget fever has started earlier than ever this year and a number of potentially significant changes are rumoured to be under consideration by the Chancellor of the Exchequer, Rachel Reeves. With the Government looking for revenue-raising measures while ruling out taxes on workers, it means that pensions and pensioners are once more under the microscope. However, following the intense debate around the means-testing of Winter Fuel Payments, just how far is the Government likely to go in search of extra money from retirees?
Posted on Wednesday Sep 25

Flood risk and how to protect your business this autumn

This year saw the Met Office report England’s wettest 18 months on record, with the current outlook suggesting autumn is likely to be wetter than usual. With the government pointing to 5.5 million properties in England alone being vulnerable to flood risk, the chance of increased rainfall underscores the urgent need to enhance your flood risk management and review the steps you can take to both protect your business and bounce back better if you’re unable to avoid flooding.
Posted on Tuesday Sep 24

Evolution of the Irish DC pensions market

The long-awaited Automatic Enrolment (AE) Retirement Savings System Bill has now been passed by Ireland’s Parliament (the Oireachtas). It will bring a further 800,000 workers into pensions savings – welcome news considering concerns around private sector pension provision. However, the proposed launch of ‘early 2025’ is still considered ambitious by many in the industry given the lags to its infrastructure and with much of the technical detail still to be released.
Posted on Monday Sep 23

Workplace pensions should set the Gold standard

A lot of us have probably been watching the amazing sport served up on our TV over the summer. It has been interesting to see the spread of generations taking part, from an 11-year-old skate boarder to a 65-year-old horse rider – an inspiration to many of us that age is not necessarily a barrier to continuing with our chosen careers. It’s clear that some sports are more conducive to longer careers than others, many of which tend to have a shorter shelf life.
Posted on Friday Sep 20

The Literal Wind of Change

Severe climate impacts are emerging at lower temperatures than previously forecast, according to the IFoA’s recent ‘Climate Scorpion’ publication(1). In light of this, an increasing focus on how to manage climate risk is becoming ever more essential. This is a difficult area for plenty of reasons. One of those is simply that many investors have a tension between a fiduciary duty to reduce climate risk and a desire to invest in ways aligned with the net zero transition. This makes decision making much harder, and it’s worth trying to draw this out.
Posted on Wednesday Sep 18

What impact will Solvency UK have on the buyin buyout market

We consider the implications of the UK’s new insurer regulatory framework – Solvency UK – for the bulk annuity market. Since 2016, insurance companies operating within the European Union have been subject to the requirements of Solvency II, a regulatory framework intended to protect policyholders by ensuring adequate levels of capitalisation and disclosure. Since the UK’s departure from the EU, the Prudential Regulation Authority (PRA) has been considering and consulting on potential reforms to the Solvency II framework, with the aim of refining it to better suit the UK market.
Posted on Tuesday Sep 17