Bulk annuity pricing ‘less predictable’ due to volatility and Solvency II

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Posted on 1st February 2016 by Solvency 2 News in Europe |UK

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Short-term bulk annuity pricing has become less predictable due to volatile market conditions and insurers adjusting to Solvency II, according to Aon Hewitt.UNPREDICTABLE1

The consultant’s bulk annuity market update for January 2016 highlighted an expected increase in the cost for bulk annuities covering members who had not yet retired.

However, material change was not expected in the best available pricing for pensioners as a result of Solvency II – the new EU-wide capital regime for insurers.

Aon Hewitt ‎risk settlement adviser Dominic Grimley pointed out many providers had already planned their market models in the medical underwriting market and that pricing had settled down accordingly, adding: “Pricing for some insurers may have gone up slightly but the best pricing is very similar to where it was last year and we’ve not seeing any shock results from the first auctions this year post-Solvency II.”

Continue Reading ” Bulk annuity pricing ‘less predictable’ due to volatility and Solvency II” at Professional Pensions

EU insurance watchdog names Italy’s Parente as new exec

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Posted on 28th January 2016 by Solvency 2 News in Europe

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Jan 28

The EU’s insurance watchdog, the European Insurance and Occupational Pensions Authority, has named Italian regulator Fausto Parente as its new Executive Director, EIOPA said on cinque-terre-italy_2799614bThursday.

Parente is currently head of supervisory regulation and policy at national and international level at Italian insurance watchdog IVASS. His LinkedIn page shows he has spent more than 20 years in insurance oversight.

Parente replaces Spaniard Carlos Montalvo, who is due to step down in March when his first term of office ends.

EIOPA has worked to develop risk capital rules for the insurance sector, known as Solvency II, which came into force at the beginning of this year and expected to…

Continue Reading “EU insurance watchdog names Italy’s Parente as new exec” at Reuters News

 

BoE insurance supervisor says EU capital rules off to smooth start

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Posted on 27th January 2016 by Solvency 2 News in Europe |UK

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The introduction of new European Union rules forcing insurers to hold enough capital to protect policyholders has gone well though some tweaks will be needed, Britain’s top insurance regulator runningsaid on Wednesday.

The EU’s Solvency II rules came into force this month, the result of many years of policy making and expensive preparations for insurers.

There has been concern among regulators about potential volatility in insurance company shares as investors compare the solvency capital ratio (SCR), a new core benchmark of health, that insurers now have to publish.

“It’s so far, so good. It’s been smooth so far,” Sam Woods, executive director for insurance supervision at the Bank of England’s Prudential Regulation Authority told Reuters on the sidelines of an industry event.

 

Continue Reading “BoE insurance supervisor says EU capital rules off to smooth start” at Reuters News

ERM progression limited by uneconomic principles of Solvency II

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Posted on 27th January 2016 by Solvency 2 News in Africa |Europe |Middle East

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Enterprise risk management (ERM) practices among European insurers have improved in the build up to Solvency II, but firms must look beyond compliance to make further gains, Standard &erm_chart Poor’s (S&P) has warned.

The rating agency released updated ERM scores for re/insurers in Europe, the Middle East and Africa (EMEA), and noted an increase in the number of insurers with ‘strong’ or ‘very strong’ ERM practices, compared with 2013.

Although Solvency II has driven a broad improvement in ERM across the European industry, S&P noted that economically inconsistent elements of the framework, such as the volatility adjustment and the ultimate forward rate, could limit ERM development if insurers are motivated by compliance rather than best practice.

Continue Reading “ERM progression limited by uneconomic principles of Solvency II” at Insurance ERM News

Insurers should prep for questions on pro-cyclicality

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Posted on 21st January 2016 by Solvency 2 News in Europe

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Insurers could be forgiven for thinking they are having a bad dream – the one where you are taking an exam, only to find when you turn over the paper that you’ve studied the wrong subject. Inrepullo fig 1 this case, the paper would be marked Solvency II, but examiners would have moved on to asking about insurers and systemic risk.

With timing that has left many in the industry dumbfounded, the European Systemic Risk Board (ESRB) published a report in December – just weeks before the implementation deadline for Europe’s new directive – saying insurers contribute to systemic risk through pro-cyclical investment behaviour, and that something should be done about it.

The ESRB’s idea is to introduce a counter-cyclical buffer, similar to the measures in place for European banks. The buffer would load additional capital requirements on firms in good markets and release some of the pressure in periods of stress. The ESRB thinks a buffer would stop insurers herding into riskier assets in bull markets and dumping them when prices fall.

Continue Reading “Insurers should prep for questions on pro-cyclicality” at Risk.net

2016: about blockchain, Solvency II and double digits

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Posted on 19th January 2016 by Solvency 2 News in Europe

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After quite a volatile 2015 and a significant sell-off in December, we are rather optimistic on the outlook for financial equities in 2016, even seeing potential for doubless_chain-250x250 digit returns.

Speed read:

  • Double digit return potential for financial equities in 2016
  • Life insurers and digital finance are attractive areas
  • Blockchain is not disruptive, but will separate winners from losers

Our basis macro-economic scenario for 2016 is one of moderate global growth and low inflation. We don’t expect very high growth numbers in neither developed nor emerging markets. US economic growth will be reasonable, with the Fed gradually hiking interest rates and long-term rates showing perhaps an even more modest increase.

Continue Reading “2016: about blockchain, Solvency II and double digits” at Robeco News

Willis Towers Watson Introduces Updated Version of ResQ Reserving Software

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Posted on 19th January 2016 by Solvency 2 News in Press Release

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Advanced software updated for innovations in reserving, improved performance and usability

 

London, Tuesday 19 January, 2016 — Global advisory, broking and solutions company Willis Towers Watson (NASDAQ: WLTW) has released

Willis-Towers_Watson

ResQ 4.0, an updated version of its reserving software for property and casualty (P&C) insurers.

With ResQ 4.0, Willis Towers Watson has concentrated on ensuring the software keeps pace with advancements in computer technology while improving the user experience, particularly around ease of use and efficiency. The principal updates include:

  • A 64-bit version of ResQ, in addition to the existing 32-bit version, beneficial for companies with very large ResQ databases and for stochastic analyses with an extensive number of simulations; also provides support for clients wanting to use 64-bit Microsoft Office
  • Refreshed user interface providing a more modern look and feel
  • The ability to save collections of methods, calculations and data sets as templates, which can then be applied elsewhere within ResQ, aiding efficiency
  • New counterparty default cash-flow method, useful for reinsurance bad debt calculations (e.g., for Solvency II) (more…)

Prudential to make first move on new capital rules

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Posted on 17th January 2016 by Solvency 2 News in UK

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Prudential will this week set a benchmark for rivals by becoming the first of the UK insurers to reveal its capital ratio under the new Solvency II rules that came into force at the start of the year.solvency-ii-capital-rules

The Solvency Capital Ratio is a measurement of the amount of capital an insurer has as a proportion of the minimum requirement.

For 2014, Prudential reported a capital ratio of 218 per cent but analysts are expecting a lower number under the new rules.

“I am expecting something in the 180-190 per cent range,” said Barrie Cornes at Panmure. Analysts at Bernstein are also expecting a figure between 180 and 190 per cent, while UBS expects it to be above 180 per cent.

Continue Reading “Prudential to make first move on new capital rules” at Financial Times

PKF to promote Malta Captives in New York

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Posted on 14th January 2016 by Solvency 2 News in Europe |USA

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PKF is to promote Malta at a conference, fully supported by experienced captive insurance managers and risk management professionals, for a day of world-class networking in New York. TheMalta sea avenue is the prestigious Bar Association building located at 42 West 44th Street in New York, USA.

The main topic of this conference is to see what Malta can offer to US Captives seeking to re-domicile or open up subsidiaries in the EU to tap into their European risks.

One may well ask, with so much competition between EU domiciles, what can Malta offer in the insurance sector which sets it apart from other offshore centres such as the Isle of Man, Channel Islands, Gibraltar and of course the Caribbean stalwarts such as Bermuda, Barbados and Cayman Islands?

Continue Reading “PKF to promote Malta Captives in New York” at Malta Today

Annuity rates have more than halved since 1994

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Posted on 12th January 2016 by Solvency 2 News in Europe

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Moneyfacts, which started recording the data since 1994, said the reduction in value was driven by low gilts, uncertainty created by pension freedoms, and preparations for the Solvency II Apple Halvesdirective, which went live earlier this month.

Solvency II has been in the pipeline for over a decade, but Richard Eagling, head of pensions at Moneyfacts, explained delays in the final set of rules and the approval of firms’ internal models, meant that most annuity providers “were not able to fully factor Solvency II requirements into their rates until the final months of the year”.

According to the study, rates “made the worst possible start to 2015”. January saw providers respond to all-time low 15-year gilt yields, leading to the biggest monthly fall that the firm had ever recorded.

Continue Reading “Annuity rates have more than halved since 1994” The Actuary