The future of insurance underwriting looks very different, with digital technology playing a starring role. With customer demands growing, the industry is under tremendous pressure to transform. Customers today expect products, services and experience tailored to them like they have seen elsewhere in life and online. They expect speed and convenience — things the industry hasn’t exactly been known for. Beyond this, we are seeing a paradigm shift with the increased use of technology, as data is now collected (by insurance) rather than declared (by clients) so that insurers price risks appropriately. We are also seeing the big tech enter the insurance space offering products health and home insurance.

With IFRS 17 live as of January 2023, we hear from a range of panel experts on getting to grips with the new standard. We look at implementation challenges, the reasoning behind policy choices and consider different approaches to the actuarial assumptions that underpin IFRS 17 results.

Digitalisation is increasing in life and health sectors including wearable and biometric devices, data intelligence on life and health records and the utilisation of genetic data. The customer experience end-to-end from purchasing insurance, premium payments, claims filing and cross-selling, as well as insurance internal activities such as underwriting, claims, billing and processing, are all online. The need for technology (InsureTech) as well as actuaries that can use and understand technology for implementing analytics is vital.
As new data sources, methods, and applications proliferate and the vast universe of Big Data grows ever bigger and less “traditional” by the day, what are the emerging professionalism and regulatory considerations these changes raise for actuaries’ data analytics work. How Big Data and artificial intelligence (AI) are impacting data analytics in the insurance space, and how regulators are scrutinizing data, algorithms and models?
Furthermore, the insurance market is growing in terms of cyber risk insurance, which is already well-developed in the US. The next major catastrophe (CAT) event could be a major cyberattack rather than another Hurricane Katrina. Cyber risk should not be priced using historical data, since the future will look nothing like the past.

Over the last couple of decades, we have experienced a consistent decrease in interest rates which have even dropped significantly below zero for swap rates. This is a trend not only in Europe, but in many markets globally, and it has been a massive challenge for guaranteed business. To overcome these challenges, innovative solutions are emerging. An example is newcomers building models based on credit underwriting capabilities that allow additional spread to be generated within a risk tolerance technique similar to large insurance risk, even if the spread risk is classified within financial risks. This represents a fantastic opportunity for life actuaries to help adapt the business model of “general business” despite a sustained low interest rate environment.
Further, panellists from different practice areas will share their insights into the potential impact of inflation for private insurance, personal finance, pension plans and major public systems. What opportunities and challenges does high inflation present to life and general insurers?

Since the launch of Bitcoin in 2009, cryptocurrencies have made the headlines with astronomical returns and equally spectacular falls in value. Speculative investors have driven volatility in crypto assets to record levels. Traditional thinking says that such assets should not form part of the portfolios of pension funds, insurance companies and other similar entities. Is it time to challenge that thinking? Does blockchain technology have a part to play in keeping the records of pensions schemes?
Decentralised finance (DeFi) and blockchain technology have the potential to revolutionise the insurance industry. DeFi protocols can provide alternative risk management strategies, such as peer-to-peer insurance, and offer insurance products with lower costs and higher returns. But, what are the challenges that need to be addressed? The insurance and pension industries need to explore and understand the potential benefits and limitations of DeFi and blockchain in order to make informed decisions on how to leverage these tools for their business?

Increases in longevity have positive and negative effects on many parties, depending on their side of the deals, services and commitments they have entered. Life insurance, pension funds, social and medical care providers on one side, and the general public and pensioners on the other side, etc. What’s the true and full impact as seen by actuaries?

In a defined-benefit pension system that may be generous today with current retirees at the expense of its future sustainability, how is intergenerational equity achieved or governed in an actuarial viewpoint?
Actuaries have long been the stalwart of pension scheme advice – providing valuations, funding updates, advice on benefits changes, product design. We look at this area in the context of the Arab region, where generous government pensions have been the norm, but are now viewed as unsustainable. What role private and personal provision has to play and how actuaries can contribute towards the design of such systems. We consider the ‘cutting edge’ of global pension designs and identify those that would be seen as most favourable across the Arab region.
In this context also, what is an actuarially fair price for obtaining guaranteed retirement benefits for life from government pension funds that adopt defined benefits? In a lot of the pension funds that are experiencing major actuarial deficits in the region, the chief reason attributed to this chronic issue is lower employee contributions, either at present or in the past.

What is the minimum foundation necessary to ensure that B.Sc. and M.Sc. actuarial graduates are fit to join at entry or higher levels in professional actuary functions? What are the common core competences expected among actuaries? How much theory vs. practice needs to be embedded in these programs, and how much traditional vs. digital when it comes to coping with increased global digitalisation?
Actuarial students are being prepared to operate in a wide variety of professional environments, including insurance, health, pension, risk management, government, regulatory organisations and other fields. Actuaries need to have a detailed understanding of economic, financial, demographic and insurance risks and expertise in developing and using statistical and financial models to inform financial decisions as well as for pricing, establishing the amount of liabilities and setting capital requirements for uncertain future events. A detailed understanding of these risks requires a solid mathematical knowledge and analytical competence. A strong technical toolkit, specifically the ability to model and understand risk, will allow the profession to thrive and grow globally.