Cardiovascular disease (CVD) is the world’s leading cause of death, accounting for nearly 18 million lives annually, or 33% of the total, well ahead of cancers which are the next highest cause of mortality (17%), according to Our World in Data. The data are also clear that CVD impacts men and women in different ways, with an overall lower prevalence of coronary…
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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