News IFoA
New longevity basis risk methodology A research project jointly commissioned by the IFoA and Life and Longevity Markets Association (LLMA) has unveiled a novel, readily applicable methodology allowing insurers and pension schemes to assess longevity basis risk. This groundbreaking work, carried out by a research team from Hymans Robertson and Cass Business School, will enable the use of simpler, more standardised and easier to execute index-based longevity solutions. There are also broader applications for insurers and pension funds in managing their capital requirements relating to longevity risk. Index-based longevity swaps allow pension schemes and insurers to offset the risk of increased liabilities resulting from members living longer than expected. Until now, it has been difficult to assess how well an index-based longevity swap can reduce longevity risk for a particular pension scheme or insurance book. The methodology developed in this research advances thinking on how this is assessed.
The framework has been designed to be applicable to both large schemes (which can use their own data in their models) and smaller schemes (by capturing demographic differences such as socio-economic class and deprivation). While the cost and complexity of longevity swaps means they have often been the preserve of large schemes, this research could make longevity swaps more accessible to smaller schemes and insurers in managing longevity risk. The development has the potential to transform the longevity swap market, which is worth £10bn per annum, opening it up to those for whom the current bespoke solutions have not proved appropriate. It is predicted that this work could provide the catalyst for growth in the still nascent market. IFoA president Nick Salter said: “We are delighted with the outcome of this research.” The research paper can be read in full on the IFoA website at bit.ly/1yw1yop
Middle Eastern promise for GAS launch The IFoA Gulf Actuarial Society (GAS) was launched in Dubai on 23 November 2014. GAS aims to bring together IFoA members based in the region and to provide networking and continuing professional development opportunities for all actuaries in the area. Thirty five participants from the six Gulf states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates attended the inaugural event, which was hosted by IFoA chief executive Derek Cribb and Catherine Love Soper, one of the founding members of the new society. To find out more about GAS, please visit bit.ly/13tVm3L
Could year-long CAA exemptions window help your career? The IFoA opened an exemptions window in November 2014 to allow those students who have relevant passes in the Fellowship exams to gain exemptions from modules on the Certified Actuarial Analyst (CAA) pathway. This is in recognition of the fact that the career aspirations of some students on the Fellowship pathway may be better served by the IFoA’s new CAA qualification. Exemptions from the CAA modules for students with passes in the Fellowship examinations will be granted as indicated online (bit.ly/1wggiWz). The option to gain exemptions from individual Actuarial Analyst modules will be available until 29 January 2016. These exemptions are free of charge for IFoA members. If you would like a presentation on the CAA qualification and its benefits, or if you have any questions, or would like further information on the CAA, then please email us at caa@actuaries.org.uk
IFoA Asia Conference 2015 13-15 May 2015, Beijing
Call for Speakers Would you like to be part of the first IFoA’s Asia Conference? This is your chance to help shape the programme and share your knowledge with actuaries in Asia. The Conference is suitable for actuaries and non-actuaries and we shall also have an afternoon session on Friday 15 May specifically for University students studying actuarial science. If you wish to present at the Conference, we want to hear from you. The committee are looking for dynamic and entertaining speakers with thought-provoking discussion and debate to cover all practice areas, suitable for an audience based in Asia.
The main topic areas are: • Life insurance and healthcare • General insurance • Pensions • Risk • Investment • Personal Development/Business skills such as communication, networking training etc • Plenary topics • University student level topics across all practice areas.
Find out more and submit your proposal: www.surveymonkey.com/s/IFoAAsia2015Callforspeakers Closing date for submissions: Friday 16 January 2015
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January 2015 • THE ACTUARY 11 www.theactuary.com