This week, the Geneva Association published a major study about how life insurers are dealing with the sustained low interest rate environment. The paper follows many months work including a survey of a number of major insurers into what actions they are taking, including what they are doing on in-force management.
For those managing the in-force at life insurers, chapter 2 of the paper is well worth a read as it gives more details on what is happening on in-force management at the moment and the priority it is given at these insurers.
It’s [in-force management] objective is to create more value by actively and better managing a business that may have been on the books for decades … value extracted from these activities can be accrued to both shareholders and customers
Key takeaways from the survey for in-force managers
- In-force management and cost reduction are the two top priorities of insurers managing to the sustained low interest rate environment
- 90% of surveyed insurers see in-force management as being in progress – some are well advanced, and others starting out
- Significant differences in how active insurers are in managing in-force customers – some are very cautious, and others more active
- Most polarising was the appetite to sell (or not) legacy portfolios – some insurers are active in this space, and others philosophically opposed to passing their customer promises onto a third party
- Organisational set-up of in-force management varies – some insurers have a clear in-force management organisation and focused resources, and others embed it in the day to day work of the individual business units
Full disclosure – I was involved in both the survey and the report.
If you have any comments or wish to discuss, please contact Matt.