Tag Archives: United Kingdom

Regulating climate-related risks

The social and economic changes caused by the COVID-19 pandemic have had a significant impact on our lives over the course of 2020. It has been argued, though, that the changes we have seen over 2020 pale in comparison to the expected impact that climate change will have on our societies and economies. Some predict that we have just 10 years to act on climate change before the damage to the planet is irreversible.  

With this in mind, regulators are looking to the financial services industry to better understand the challenges posed by climate risk, including a transition to a low-carbon economy. This briefing note by Milliman’s Sinéad ClarkeOrlaith Lehane and Eóin Stack provides a beginner’s guide to climate risk for Irish insurers. It includes a high-level introduction to climate-related risks and information on what the Central Bank of Ireland and European Insurance and Occupational Pensions Authority are currently doing in relation to climate risk in addition to an overview of the approach taken by regulators in the UK. 

Roundtable discussion explores COVID-19 implications for UK life insurers

A panel of senior UK insurance investment professionals joined Milliman in late July to share thoughts on the economic implications of COVID-19. The meeting was conducted under Chatham House rules. Below is a list of participants and moderators.


  • Joseph Canavan – Head of Capital Management at Royal London
  • Andrew Dickson – Head of Asset-Liability Management at Aegon
  • Michael Eakins – Chief Investment Officer at Phoenix Group
  • Prasun Mathur – Head of Private Assets at Aviva UK Life
  • Corrado Pistarino – Chief Investment Officer at Foresters Friendly Society


To read the summary of key points from the discussion, click here.

Solvency II unit matching considerations for UK insurers

Solvency II unit matching is no longer just a theoretical concept, but rather a common strategy used by UK insurers with material blocks of unit-linked business to help improve liquidity and balance sheet stability, and better manage market risks. This paper by Milliman’s Emma HutchinsonFred Vosvenieks, and Paul Fulcher highlights lessons learned from implementations in the UK market and the practical challenges to implementation in other countries.

COVID-19: What have we learnt from Solvency II reports from UK life insurers?

In March, the European Insurance and Occupational Pensions Authority (EIOPA) published its recommendations on the implications of COVID-19 for supervisory reporting and financial disclosure. EIOPA recommended that insurers consider the pandemic as a “major development” and publish appropriate information in their Solvency and Financial Condition Reports (SFCRs) on the effect of COVID-19 on their business.

However, EIOPA did not prescribe the possible format or extent of such disclosure. As a result, different approaches were taken by insurers to meet the disclosure requirements. They ranged from having dedicated sections for the impact of COVID-19 to having a few lines giving a brief description of the potential impact at much higher levels.

In this paper, Milliman’s Paul Fulcher, Sihong Zhu, and Samuel Burgess review the SFCRs recently published by major life insurers in the United Kingdom to examine the disclosures made on the impact of COVID-19 and what can be learnt about the impact the epidemic has had.

PRA stress test considerations for UK life insurers

In June, the Prudential Regulation Authority (PRA) published its feedback to general and life insurers following their participation in the Insurance Stress Test (IST) 2019 exercise and the more recent stress test exercise specific to COVID-19.

IST 2019 was the third IST conducted by the PRA since the introduction of Solvency II. However, IST 2019 was the first in which UK life insurers participated (the first two tests being restricted to general insurers) and only life insurers with significant annuity exposures were invited to participate.

This paper by Milliman professionals summarises the key feedback from the PRA and discusses the expected implications for life insurers in the United Kingdom over the course of 2020 and beyond.

TR19/3 FCA Thematic Review

In April 2019, the Financial Conduct Authority (FCA) published the findings from its thematic review, TR19/3: Review of the fair treatment of with-profits customers. In this review, the FCA focused on the areas of with-profits fund management it assessed as presenting the highest risk of customer harm at present. These were Investment Strategy & Management, Capital Management: Estate Distribution & Fund Resolution, Capital Management: Allocation of Risk & Reward between Stakeholders, and Governance. Milliman consultant Jennifer van der Ree offers more perspective in this briefing note.