Human activities have accelerated biosphere change on this planet. Key drivers of the climate crisis include the burning of fossil fuels and deforestation. As a result of these drivers, organisms have been moved around the planet, habitats have been fragmented, polluted, or entirely lost, and biodiversity has been watered down and, in some areas, vanished. The health impacts of these activities include amongst other things, increased respiratory and cardiac…
Insurers are favouring funded re as it helps firms manage the market and longevity risks associated with writing bulk purchase annuity (BPA) business by reducing capital charges and therefore making PRT deals more competitive.
Unsurprisingly, given its growth and potential for capital optimisation, UK regulators have been carefully watching the increased use of funded re. In June 2023, the Prudential Regulatory Authority (PRA) sent a “Dear CRO’ letter to heads of risk at UK life insurers.
The letter outlined the regulator’s two main concerns from a sectoral review which it had carried out.
“One of the key risks arising in funded re is that firms recapture sub-optimal portfolios with depressed values and with limited ability to be transformed effectively to the firms’ preferred portfolio,” the PRA letter said.
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