It’s incredibly difficult to measure the size of the life ILS market in terms of assets under management held by investment funds. There’s little publicly available data, and naturally, many asset managers won’t provide information unless they’re forced to. So, we wanted to ask our readers what they thought, with a little bit of educated guessing on our part. We offered three…
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.
Post a comment
Related Posts
Update in Delaware Estate Litigation Case Provides Added Clarity to Life Settlement Market
Delaware Supreme Court opinion says that the three-year statute of limitations applies to estates seeking…
Defined Benefit Pension Fund Investment Strategies in Focus Amid Gilts-Linked Pension Risk Transfer Pricing
Gilts-based investment approach is feeding through to the prices offered to pension schemes entering BPA…
More UK Life Insurer Equity Release Securitisation on the Horizon?
The UK’s equity release securitisation market has re-emerged in recent years as a tool in…
Longevity Swap Activity Expected to Rise as Run-Ons Look More Attractive
WTW’s De-Risking Report 2026 suggests that longevity swaps are becoming increasingly interesting to UK defined…
