Highlights from our third Discoveries Series event

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Charlotte Fletcher

December 11, 2023

3 mins read

In October, we hosted the third event in our Discoveries Series focusing on ‘BPA challenges; past, present and future’. We welcomed guests from across the de-risking industry to discuss the challenges we’ve overcome, the ones we’re currently working through and the hurdles that are on the horizon.

Our host for the evening, Charlotte Fletcher, Business Development Actuary in our Defined Benefit Solutions team, takes a look at what was discussed on the night and the key takeaways.

Past challenges

We started the evening by considering the market context and how this has impacted the challenges the industry has seen in the past.

There has been substantial growth in the market over the past few years, with the many schemes that have enjoyed improvements in their buyout funding levels looking to lock in security for member benefits. Market volumes over the past two years have been close to £30bn, and it is not out of the question that market volumes could hit £60-70bn in the coming years.

With such high volumes, it’s no surprise that there have been many challenges to overcome. We covered the progress the industry has made on education of industry professionals and trustees, deferred pricing, and residual risks cover.

Present hurdles

To help gauge the current challenges facing the market, ahead of the event, we asked attendees to share with us their biggest pain points in the BPA process, and some clear themes emerged.

We divided feedback into themes from an insurer and client perspective and discussed the commonalities and differences of each. Here’s a view of the topics discussed:

Insurer perspective Client perspective
Process management Insurer engagement
Capacity Capacity
Data Data
Deferred premiums Illiquid assets

The big ticket item from an insurer perspective is process management. Open communication, clear objectives, and flexibility where possible are the key ingredients to secure insurer engagement.

Challenges and solutions on the horizon

Bringing the focus towards the future of the de-risking industry, we asked the people in the room for their views on the biggest challenges facing the industry in the next five years. There were a range of answers from capacity to regulatory reform in the form of Solvency II.

This time we considered potential solutions to the challenges, with discussion around technology required to support with capacity constraints, data streamlining and pricing capability. Data in particular proved a conversation starter with many in the room identifying a need for industry-wide improvements and guidance to support a templated or ‘one best way of doing things’ mindset.

The key takeaways

With a lot of ground covered over the course of the evening, and many ideas to take forward, we’ve broken the conversation down into three key takeaways:

  1. There are commonalities in the challenges insurers and clients face: capacity, administration and managing illiquid assets all featured on the lists.
  2. Clear-selection criteria, and a flexible process does help improve insurer engagement.
  3. As we head into the future, innovation and technological capability across market participants will be key.

Standard Life are committed to working closely with prospective clients and their advisers to find bespoke solutions to problems that arise.

Join us at future events

If you have a passion for the de-risking industry and want to join a group of likeminded professionals to discuss the hottest topics in the space, complete our contact form to make sure you’re invited to our next event.

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