Deepak Jobanputra believes the ongoing financial volatility we are seeing holds its own opportunities
Recent years have proved a rollercoaster ride for global markets. The initial phase encompassed shock, headlines and punditry, and society took an active interest in following the views of what was to come next. More recently, however, we have become desensitised to new developments. It seems we almost expect 'shock' events to be the norm and just shrug our shoulders. Is this a good or bad thing?
At the time of writing, the news of a tax on savings in Cyprus has the potential to send jitters across the globe, yet equity markets in some regions have been soaring. Clearly, a vast range of factors is at play and there is good reason for this to be the case. Consumers will, however, wish to seek out more stable outcomes and overall certainty for their financial planning. The current volatility makes this difficult, although it is balanced to some degree by government and regulatory attempts to ensure stability. These changes will hopefully bring about greater confidence among consumers, allowing insurers to provide valuable financial solutions to drive social good across the world.
An interesting insight from our interview with John Kay was that actuaries should challenge their complex financial models and provide more narrative solutions, using their skills to express subjective opinions. This, I'm sure, will drive positive debate as it raises a number of complex questions.
Coming back to consumer solutions, we have a range of features this month looking at the developing underwritten annuity market, where growth has been strong. Although the market is still in its infancy, there is tremendous opportunity for insurers to innovate and provide customers with effective solutions, reaching into areas such as long-term care, which is a key issue facing ageing populations.
I do believe we are yet to see the full effects of the demographic shift. This is definitely an area where actuaries have a leading role to play in shaping future outcomes.