Category Archives: Life

Rating outlook for UK life firms stable, says Fitch

The rating outlook for the UK life assurance sector remains stable, according to a new report by statistical rating organisation Fitch.

Fitch’s latest outlook assumes a weak economic recovery, with modest GDP growth. It is yet to account for shocks to the economy, but can be updated if unexpected events were to occur.

Fitch’s insurance team senior director David Prowse said: “In contrast to several European insurers, most UK life insurers have negligible direct exposure to the sovereign debt of Greece, Italy, Ireland, Portugal and Spain – typically less than 5% of shareholders’ equity.”

Two out of five adults have had a near death experience

Research from MetLife shows that the average number of life threatening experiences during an adult life is one. However, 19% of people who took part in the nationwide survey had twice suffered a near death experience – and 8% had suffered three or more.

Most life threatening accidents took place on the road: 35% were involved in potentially fatal car crashes, while 11% have nearly died riding bikes or motorbikes. Whilst the majority of accidents took place on the road, one in ten adults was involved in a dangerous accident whilst at home or work.

This research underlines the importance of providing life insurance for staff through employee benefits schemes.

Stephanie Baillie, Employee Benefits Director of MetLife UK said “Risk is something we all live with day to day and life-threatening experiences are unfortunately relatively common. It is reassuring to know that in many cases people survive them. Sadly it is not always the case and insurance cover that protects against life’s uncertainties is absolutely essential and valuable if it is part of a well-designed employee benefits package.”

The consequences of living longer – the 2011 Census

We all know that people are living longer, which impacts on many areas of welfare, society  and finance.  Fraser Smart, Managing Director of Buck Consultants, discusses the data from the 2011 census:

“Much of what this data reveals should come as no surprise to those of us in the pensions industry, people in England and Wales are living longer than they did 100 years ago. There is a decreasing proportion of the population that is aged under 15 and an increasing proportion that is aged 65 and over. The percentage of residents aged 65 and over was the highest seen in any census at 16.4 per cent, which means that one in six people in the population was 65 and over in 2011. In 1911, the figure was one in twenty.

“Very worryingly the number of active members of occupational pension schemes is at the lowest level since the 1950s. Employee membership of employer-sponsored pensions in the private sector fell from 46% in 1997 to 32% in 2011. In 2010 the average worker in a private sector defined benefit pension scheme contributed 5.1% of salary to their pension, compared with 2.7% for employees in defined contribution occupational pension arrangements.

“Great news we are all living longer, as no doubt we all wished for. However, this has now come to the attention of those in authority and, with an ever increasing percentage of the population relying on pension income. We are awaiting with interest the Government’s proposals on defined ambition pensions which are expected later this year. Radical reform of pensions arrangements are needed to meet the needs of a growing population of pensioners in the wake of the disappearance of final salary pension schemes.

“I would love final salary schemes to make a comeback, but the reality are that most are in their endgame paying out benefits rather than accruing new liabilities. Will the Government be brave enough to remove the shackles which led to a large extent to the disappearance of final salary schemes? We will have to wait and see.”


Thought Leadership Lecture: The Challenge of Climate Change

A lecture on the implications on climate change faced by financial institutions will take place at Staple Inn Hall this month. Starting at 3.30pm on Tuesday 3rd July the event will finish at 6.30pm with a chance for guests to ask questions to speaker Professor Sir Brian Hoskins.

Climate change due to human activities is a challenge to scientists, engineers, industry, the financial sector, policy makers and society in general. A discussion will be given of the approach by the UK Climate Change Committee and the implications of the acceptance of that advice.

Sir Brian Hoskins is Director of the Grantham Institute for Climate Change at Imperial College and Professor of Meteorology at the University of Reading. He is currently on the Board of the Met Office and chairs its Scientific Advisory Committee, and he is a member of the UK Committee on Climate Change.

For more information please contact Staple Inn Hall on 020 7632 1498 or email

Virtual Library for Actuaries

As a member of the life committees I’m delighted to introduce you to a new service to members. They have developed a virtual library of life insurance papers. The library ( currently contains over 40 papers, which have appeared in past issues of the ASTIN Bulletin – The Journal of the IAA and Insurance: Mathematics and Economics. Papers from past Life Section colloquia will also be added to the library. The library provides the following information for each paper: title, author, source, year of publication and abstract. Additionally, we have included a filter option which allow viewers to limit the display to various categories. The library also includes a form allowing members to suggest papers to be added to the library. A member of the Life Section Committee has been appointed to review potential submissions for inclusion in the library. Please make sure that you are logged into the IAA Website as a member in order for your access rights to be authenticated.


Actuaries warn that pension costs to rise

The BBC has reported that the mortality rate in England and Wales improved again last year.  This could have a knock-on effect on pensions, actuaries have suggested. The number of deaths fell to 484,000, according to official figures.

After examining the figures the Actuarial Profession said the death rate fell by 4% – down from an average annual drop of 2.4% in the previous decade.

Falling death rates would inevitably make it more expensive to fund pension schemes. Last year was the third in a row in which deaths had been below 500,000.

The figures – from the Office for National Statistics (ONS) – suggest that 20,000 fewer people died in 2011 than would have done in previous years.

Punter Southall’s head of mortality research, Ross Matthews, said: “If the 2011 fall in mortality rates continued, a man of 65 retiring today could expect to live to 91, three years longer than the typical current estimate of 88.”

“A 45-year-old would live to 95, seven years longer. This equates to an increase of up to 15% on pension scheme liabilities, potentially driving deficits by up to 50%”.

But Gordon Sharp, of the Actuarial Profession, warned that death rates could be volatile from year to year, and said that not too much should be read into one year’s provisional improvement.

GAAPS Top Consultant Interviewed by Famous French Financial Newspaper

Mrs Sophie Sicard, one of our top consultants in the French market, was recently interviewed by L’Agefi, a famous business and financial newspaper, highly appreciated among citizens of the “Pays des Lumiѐres”.

Sophie explains the importance of actuarial skills, which have become more and more appreciated not only within assurance companies but also in Investment Banking.

Actuaries solve practical problems. Certainly, some of them are essentially connected to insurance. However, they are more and more requested in the resolution of problems related to finance, in particular in the trading rooms’ risk management. Especially with increasing complexity of financial products it is necessary to take into account a largest number of risks, in a very rigorous, coherent and transparent way.

A few years ago, the investment department would have been considered the best place to work. Lately, actuarial skills have become essential in risk management, as well as in financial engineering. In addition, with the introduction of Basel II, a huge range of new opportunities have come up.

But “Just having a sound set of technical skills is not enough” -said Sophie- “They also need to develop other types of soft skills. Communication skills, ability to liaise effectively at all levels and managing team are also very important “.  Being able to explain complex technical concepts to non-technical people in an easy to understand language is a crucial aspect to succeed in this profession.

If you would like to find out more about the original interview (in French), click on this link:  Full article. There is an approximate translation into English here.