The UK’s Continuous Mortality Investigation released the latest annual update to its CMI Mortality Projections Model, CMI_2025, on 10th March, showing cohort life expectancies at age 65 that are about eight weeks higher for males and about six weeks higher for females than in the previous version of the CMI model, CMI_2024.
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.Â
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.
Post a comment
Related Posts
Awareness Raising is More Than Just a One-Month Campaign for Life Settlement Market
Life settlement market requires perpetual effort to educate policyholders about the life settlement option.
Slowing US PRT Market Sees Insurers Jostling for Business as Buy-Ins Surge
A consequence of a slowing US pension risk transfer market this year is that more…
Bermuda Life & Annuity Sidecar Market Quadruples as Alternative Asset Manager/Life Insurance Convergence Continues
The life & annuity sidecar market in Bermuda has grown almost four-fold to approximately $375bn…
Insurers Sweeten Bulk Purchase Annuity Offers as Buy-Out Timetables – and Costs – Look Set To Increase
Increased competition for defined benefit pension schemes’ de-risking business in the UK has resulted in…
