In one of the major milestones of the review of Capital Standards for Australian insurers, this week APRA released many of the final Standards, with some further draft changes to other Standards that will also because of the review. Most of the changes had been foreshadowed as part of theContinue Reading
Warning: technical actuarial post ahead! This is a guest post from my colleague, Michael Dermody. On Friday, APRA issued a letter to all CEOs and Appointed Actuaries of life insurers detailed its proposal for calculating the illiquidity premium in the discount rate for certain liabilities as part of the Life InsuranceContinue Reading
Most financial services companies these days have a risk management framework with three lines of defence. The diagram below shows the three lines of defence, as illustrated by a bank. So where does the Appointed Actuary fit into this picture? The original Appointed Actuary in the UK was effectively solelyContinue Reading
Regulatory change is a constant in most financial services areas these days. Insurance in Australia is no different. APRA is in the middle of a major upgrade to the regulatory capital regime for life and general insurers, which is due to start from 1 January 2013. So far, most ofContinue Reading
A few weeks ago, the Penguin family had a very enjoyable time at Rocket Car Day, in inner-city Sydney. Our car, the Silver Surfer, won its heat, and was a respectable third place in its repechage final (also in the SMH here). The day was very enjoyable. It was entirelyContinue Reading
My dad, who isn’t competitive at all, asked me recently how old he would have to be before he had outlived 50% of his contemporaries. He suspects he may have passed that age sometime in the past few years. So I’ve been exploring the ABS mortality statistics. If you lookContinue Reading
The insurance cycle is something that is well known to general insurers (property and casualty, if you are in the US). For many classes of business, the price of insurance fluctuates much more than the underlying cost. The general consensus is that it is about availability of capital. If theContinue Reading
This is the paper which provides the background behind a presentation on economic capital which I made to the Institute of Actuaries of Australia’s Biennial Convention. How and why should we measure it? Economic capital means different things to different people. But for this presentation, the purpose of economic capitalContinue Reading
A few weeks ago, APRA released a new draft set of Prudential Standards for Life Insurance. They’re generally following the standards that were released for general insurers late last year. Basically, they require a life insurance company to have a risk management framework in place, which the guidance notes giveContinue Reading