Richard Schneider describes the IFoA Life Research Committees activities, instigating member-led research and giving members a voice in the wider financial world
The IFoA has an active research programme, driven by research committees within each of its main practice areas and the Actuarial Research Centre. The Life Research Committee (LRC) drives the research agenda of the life practice area. It consists of around 10 members, including a mix of life office actuaries, actuarial consultants, academics and IFoA staff.
The life research agenda is dynamic, and responsive to the regulatory change that life practitioners have recently had to deal with. In addition to traditional themes of regulation and reporting, the LRC aims to extend the profession's research horizons into new areas. It achieves its goals through instigating, supporting and overseeing member-led research working parties from inception to delivery of output.
Output typically takes the form of formal research papers, often presented at IFoA sessional meetings, but could also be presentations to conferences and regional societies, as well as magazine and newsletter articles. Social media is also increasingly used to disseminate interim results and stimulate debate.
To supplement this work, the LRC engages with academia and commissions academic research, for example via the Actuarial Research Centre. The committee is always open to interesting and relevant new research ideas, and typically initiates around three new working parties each year. It is also focused on helping the profession to have a voice in the wider financial world, so works closely with the IFoA's communications team.
At present there are 18 active life working parties and two further cross-practice working parties. Most of the working parties can be divided into those that focus on customer and product, and those focusing on regulation and regulatory change.
Three of these working parties were established in the latter half of 2018 in response to the upcoming implementation of IFRS 17, the new international accounting standard for insurance reporting.
They have made a positive start, already looking to disseminate some of their thinking - particularly around contractual service margins and discount rates. Prior to that, several working parties were established in response to Solvency II, looking at the impact of the new capital regulations in a number of 'hot' areas, including matching adjustment, risk margin, transitional measures and equity release valuation. These working parties have been actively promoting their views to UK and European regulators, through both formal consultation responses and more informal means.
On the customer and product side, working parties are considering such diverse topics as policyholder behaviour in extreme conditions, the design of risk metrics for consumers of insurance products, the value of with-profits products to consumers, and financial literacy. Another group is considering innovation in retirement products, and, for the more technically astute, there is a long-standing group looking at modelling of extreme events.
The profession is always looking for volunteers to support its activities. If you are interested in becoming a thought leader within the profession, potentially influencing regulators and policymakers, or developing a network of contacts outside your workplace, or if you simply want to fulfil your CPD requirements by giving back to your profession, please visit bit.ly/1mKL1JE, where you will find details of existing vacancies, either for the LRC itself or one of its research working parties.
Richard Schneider is an independent actuarial consultant and member of the Life Research Committee
On the horizon
An event frequently used by working parties to showcase their research is the Life Conference, and 2018 was no different; Matching Adjustment, Risk Margin, Equity Release, Financial Literacy, Reinsurance and Taxation groups all gave presentations.
A survey on research 'hot topics' was also undertaken, covering ideas such as the impact of artificial intelligence on the role of the actuary, the role of regulators in supporting innovation and competition, and the impact of regulation on risk management techniques. The LRC is currently analysing the results and identifying the next batch of new working parties.
This year, the Life Conference will be held in Dublin on 20-22 November.