Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • January 2014
01

US: Towers Watson poll highlights challenges of life insurance reporting changes

Open-access content Thursday 16th January 2014 — updated 1.14pm, Tuesday 5th May 2020

US life insurers should view new regulatory reporting changes as a way to strengthen their companies or face cost and talent management challenges, according to Towers Watson.

The firm conducted a survey that explored life insurers' preparation to comply with current and emerging regulatory requirements and the impact these new regulations would have on business operations.

Towers Watson polled 20 life insurance chief financial officers and the survey addressed requirements for the International Financial Reporting Standards (IFRS) 4 Phase 2; National Association of Insurance Commissioners (NAIC) Own Risk and Solvency Assessment (ORSA); NAIC Valuation Manual (VM) 20; Actuarial Guideline (AG) 38, revisions for 8D and 8E; and Statement of Statutory Accounting Principles (SSAP) 102/92.

Jack Gibson, managing director of life insurance consulting at the firm said: 'The looming challenges are evident. Preparing for [the regulatory requirements] provides insurers with a great opportunity to assess reserving and capital, reporting functions and enterprise risk management. They can also use it to re-evaluate whether new talent is needed, or existing talent can be further challenged with new responsibilities.

'The complexity of these new life insurance regulatory requirements makes it imperative that insurers understand exactly how these changes will alter everything in their business - from supplementary reporting to capital financing for products such as universal life with secondary guarantees and term insurance.'

However, the survey found that only a small number (13%) of CFOs report that key personnel were experts in each of the regulatory reporting requirements examined in the survey, while slightly over one quarter (27%) understood the basics for each initiative.

Gibson added: 'Even if CFOs have people who know the intricate details of these regulations and are able to focus on near-and long-term planning for financial functions, that planning will be easier if CFOs are well-informed on the life insurance regulatory changes.

'But according to our results, the majority understand just the basics, or have a low level knowledge-base on most of the reporting requirements.'

The survey also highlighted that 80% said they would draw on a combination of maintaining technological knowledge in-house, with at least some outsourcing to comply with the IFRS 4 Phase 2 framework. However, CFOs expect to make only moderate, if any, changes to current staffing levels to address the new reporting requirements.

The firm added that all new regulations were likely to cause changes to insurers' current software models production processes. Over half (56%) of the CFOs surveyed expect major changes to product design and pricing for universal life (UL) with secondary guarantees.

Gibson said insurers that are able to create systems flexible enough to incorporate these new changes and adapt to future changes would be best positioned to manage software-related costs.

Meanwhile, most CFOs expect to make at least moderate changes to their governance, process and controls in response to all five regulations, but more than 60% anticipate implementation challenges.

The firm said it was 'remarkable' that many insurers didn't have significant controls and governance in place to meet these new requirements. 

This article appeared in our January 2014 issue of The Actuary .
Click here to view this issue

You may also be interested in...

ta

2013 'best year' for US pension schemes, says Mercer

Strong equity returns and rising interest rates in the fourth quarter of 2013 ended the best year of improvement in the funding status of US pension plans, according to Mercer latest monthly health index
Friday 3rd January 2014
Open-access content

Further personal allowance hikes 'could hit pension saving'

Proposals to increase the income tax personal allowance to £12,500 could hit pension savings by taking many low-paid workers out of auto-enrolment, a report has warned today
Thursday 16th January 2014
Open-access content

Business 'complacent' about cyber crime and terror risks, says Aon

Cyber crime and terror risks have been severely underrated as major threats affecting businesses in today’s ‘hyper-connected world’, according to an Aon survey of insurance captive directors
Wednesday 15th January 2014
Open-access content

Smokers' annuity rates up by more than 6%

Annuity rates for smokers shot up by 6.28% last month, according to latest figures from the Annuity Bureau’s January table
Friday 17th January 2014
Open-access content

Business interruption tops Allianz's corporate risk poll

Interruption to business and supply chain losses have been ranked as the top business risk for 2014 following a poll of corporate insurance experts
Tuesday 14th January 2014
Open-access content

PPF DB pension deficits fall to £27.6bn

The aggregate deficit of the UK’s defined benefit pension schemes more than halved last month, according to figures published today by the Pension Protection Fund
Tuesday 14th January 2014
Open-access content

Latest from Global

rdth

Make My Money Matter's Tony Burdon on the practical power of sustainable pensions

Years working in international development showed Tony Burdon, head of Make My Money Matter, that sustainable pensions can harness trillions of pounds to build a better world – at a scale governments and charities can’t. He talks to Travis Elsum
Wednesday 1st March 2023
Open-access content
ULH

Growth of the profession in Zambia

One of only three Fellows in Zambia, Mulenga C Mutati anticipates exciting growth in the country’s actuarial sector
Wednesday 1st February 2023
Open-access content
cj

Natural capital investing

Chris Howells and Andrew Dreaneen discuss how today’s investments in natural capital profit portfolios as well as the planet and humanity
Wednesday 1st February 2023
Open-access content

Latest from January 2014

2

Severe winter weather to cost UK insurers £1.1bn, says ABI

Insurers will be hit with a £1.1bn bill following the floods and storms that hit the UK over the winter, the Association of British Insurers said today.
Thursday 13th March 2014
Open-access content

Fitch puts UK storm losses at £1.2bn

UK insurers could face losses of up to £1.2bn following the recent winter floods and storms, according to Fitch Rating, however, these are expected to be manageable.
Wednesday 5th March 2014
Open-access content

Pensions questions remain for independent Scotland, say accountants

The Scottish Government has failed to answer key questions on the impact independence would have on pensions, an accountancy body warned today.
Monday 3rd February 2014
Open-access content

Latest from no_opening_image

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
web_p24_cat-and-fish_iStock-483454069.png

Sensitivity analysis: swimming lessons

Silvana Pesenti, Alberto Bettini, Pietro Millossovich and Andreas Tsanakas present their alternative approach to sensitivity analysis
Wednesday 4th March 2020
Open-access content
ta

IFoA adjudication panel: Mr Jack Wicks, student

On 30 October 2019 the Adjudication Panel considered an allegation of misconduct against Mr Jack Wicks (the respondent).
Friday 28th February 2020
Open-access content

Latest from 01

2

Severe winter weather to cost UK insurers £1.1bn, says ABI

Insurers will be hit with a £1.1bn bill following the floods and storms that hit the UK over the winter, the Association of British Insurers said today.
Thursday 13th March 2014
Open-access content

Fitch puts UK storm losses at £1.2bn

UK insurers could face losses of up to £1.2bn following the recent winter floods and storms, according to Fitch Rating, however, these are expected to be manageable.
Wednesday 5th March 2014
Open-access content

Pensions questions remain for independent Scotland, say accountants

The Scottish Government has failed to answer key questions on the impact independence would have on pensions, an accountancy body warned today.
Monday 3rd February 2014
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

BPA Transition Manager

London, England / Edinburgh, Scotland
£45000 - £65000 per annum + market leading bonus and benefits
Reference
148878

London Market Pricing Contracts - Inside & Outside IR35

London (Central)
£1000 - £1300 per day
Reference
148877

SME Pricing Director

London (Central), London (Greater)
£225K + bonus + benefits
Reference
148872
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ