Description: Businesses across the board have been drastically impacted by the effects of COVID-19 over the course of 2020, and insurance was not immune. Perhaps most relevant to this industry’s current capital and liquidity concern is the prevailing low interest rate environment. This has been a global trend in the last decade, and treasury rates in much of the developed world are at or near zero. Reduced investment returns limit an insurer’s ability to achieve their desired return on equity, eliminating previously profitable strategies that depended on the leverage of life and annuity balance sheets. Focus and activity have instead shifted to other methods to counteract the low interest rate markets and accompanying capital strain. Examples include increased mergers and acquisitions (M&A) activity within the insurance industry and an increasing focus by private equity firms in the insurance market for asset-intensive products, both of which reflect the goal of increasing yield rates on capital.

Description: The ideal business situations for securitization would be those where a company faces significant risks or has significant growth opportunities and where conventional sources of risk hedging or financing are not available or are too expensive. Ultimately, securitization should be able to provide hedging and/or financing that is more effective and less expensive than the alternatives.

Description: This article contains the statistics of the equity premium or market risk premium [MRP] uses in 2011 for 56 countries. The paper also contains the references used to justify the MRP and comments from persons that both use and do not use MRP.

Description: Discusses the market, demographic, and macroeconomic factors that affect actuaries' choices for the assumptions they use in the pricing and valuation of many insurance products.

Description: This article discusses how insurers that focus on their core competencies and astutely outsource other functions will become more competitive and improve their performance.

Description: S&P Global released its initial version of proposed changes regarding its Insurer Risk-Based Capital Adequacy methodology and assumptions on Dec. 6th, 2021. Unlike prior guidance notes or criteria releases, the proposed changes comprehensively updated the current S&P rating criteria released in 2010. These updates would directly impact many insurers. S&P Global anticipates that 10 percent of existing ratings in the insurance sector would be impacted and the change would lead to more positive rating implications than negative impact. This article focuses on the proposed changes on the S&P risk-based capital (RBC) vs. the current model, then simulate impacts to a representative U.S. life insurer through an illustrative case study.

Description: An overview of the recent Advanced Risk Management Seminar New York, December 2002.

Description: This article explores the possibility of using innovations from the financial markets to reduce some portion of the LTC risk and thus encourage the growth of the product.

Description: This articles gives an overview of the recent Investment Actuary Symposium.

Description: Financial illiteracy has been identified as a major obstacle to effective retirement planning for Americans. Anna Rappaport’s article provides actuaries with helpful ideas about ways to make the public more aware of the increasing need for financial literacy and some of the resources currently available to help individuals.