Whether it’s Treating Customers Fairly, Fair Treatment of Consumers or Fair Dealing, regulators around the world are increasingly focusing on the role that remuneration plays in the provision of financial advice and in particular on ensuring that commissions or other variable pay elements do not influence product recommendations. In this article, Stephen Cotham and Simmi Mehta discuss this development and consider if insurance can learn from other financial services sectors in this regard.
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Insurers are facing more complex modelling needs. Recent market turmoil, advances in regulatory and supervision, together with an increasingly competitive business environment, has made insurers focus on more frequent reporting of complex risk metrics, and consequently the need for more efficient models. Variance reduction techniques have attracted growing attention from insurers as a simple and robust way to improve model efficiency. In this article, Flora Chan looks at how variance reduction can be used in improving model accuracy and goes further by drawing the link with replicating portfolios.
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Despite being a pioneer as well as a leading company of the variable annuity market, Hartford Life has discontinued new business sales with effect from June 2009. A withdrawal of the most successful company was symbolic for the Japanese variable annuity market, which has been badly influenced by the recent financial market turmoil. Surprisingly, ING Life and Mitsui Life have also announced their withdrawal from this market. Other players have also started to review their strategies, including the product features that they provide. Against the backdrop of these significant recent changes, in this article, Tomonori Asada reviews the success and the failure of the variable annuity market in Japan.
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Our interview this edition is with Nigel Knowles, head of risk and value management Asia-Pacific and practice leader for our Hong Kong office, to whom we introduced you in the previous edition. Here, Nigel provides some of his thoughts on the outlook for risk and value management in Asia-Pacific.
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Successful Asset Liability Management (ALM) requires the blending of
techniques and knowledge derived from several disciplines, such as
investment, actuarial and finance, each with its own glossary of terminology
and perspective on the financial management of an insurance company.
Mark Birch looks at how the
role of an ALM Champion can be defined so as to facilitate blending process
and how the effectiveness of an ALM infrastructure within an organisation
can be measured.
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Based on our experience in carrying out projects across a large number of
countries in Asia, we believe that prior to the Global Financial Crisis,
capital management occupied a low level of importance for many non-life
insurance companies' management teams. In this article,
Verne Baker looks at the
state of capital management in a selection of Asian countries prior to the
GFC and considers some possible changes that may occur in the near future as
a result of the events of the past couple of years.
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Rajagopalan
Krishnamurthy and
Anuradha Sriram discuss the important trends in employee health benefits
business in India which is emerging as the promising market for health
insurance business.
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A newly included regular feature to introduce some of the people in
Watson Wyatt. We are starting this at top with a brief interview with
Richard Holloway, our
regional practice director. Also, we are delighted to remind you of the
appointment of Nigel Knowles
as head of risk and value management Asia-Pacific and as practice leader for
our Hong Kong office.
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In this article, Michael Daly and Peter Lee look at the dramatic winds of
change affecting actuarial functions, what it means for insurers operating
in an increasingly demanding environment in Asia-Pacific and how companies
can respond.
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Article by Naomi Burger, with thanks to Sumit Narayanan and Peter Lee for
their input. Naomi Burger investigated how capital measurement approaches
have changed in recent years and a description of some of the implementation
issues encountered in Asia.
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The two Asian economic giants of China and India display an interesting
mix of sales practices across their bancassurance sales platforms, Stephen
Cotham, Michael Ross and Rajagopalan Krishnamurthy revealed findings of
mystery shopping exercises carried out by Watson Wyatt in May and September
2008. With thanks to Christopher Greenhill for his input.
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The articles in this publication are for general interest only. Action should not be taken on the basis of any article without seeking specific guidance.
Copyright 2010 Towers Watson. All rights reserved.
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