Life Perspectives, Spring 2025

Insuring the Future Investment Summit Coming to NYC in May

Kehrberg

Hosted by the Life Practice Council (LPC) and the LPC’s Investment Analysis Subcommittee, the Academy’s Insuring the Future: Insurance Investment Summit will be held May 22–23 in New York City.

The inaugural event will bring together insurance investment professionals, including actuaries, asset managers, and executives from the life, retirement, health, and property-casualty sectors. Check out the full agenda. Early discounts are available through April 15 and the special discounted hotel room rate at the New York Marriott Marquis can be extended through the weekend to take advantage of New York City—register today.

Life Perspectives asked Academy Life Vice President Jason Kehrberg about why people should attend this inaugural event.

What was the inspiration behind this event, and how does it fill a gap in the current landscape of insurance investment conferences?

In a lot of ways, the industry looks to the actuarial profession to not only price the products but also to ensure that insurers remain solvent to pay the promised benefits. Ensuring that products can be delivered competitively and demonstrating solvency requires partnerships across the industry. We are envisioning the Insurance Investment Summit as a forum for insurers and investment managers to connect to share ideas and gain a better understanding of industry needs and available investment solutions.

The inspiration for this event is multifaceted:

• Increasing regulatory focus on investments (e.g., Actuarial Guideline 53).
• Growing importance of investment portfolio performance for insurers.
• Creating a forum for insurance company executives and investment managers to connect.

Given the increasing complexity of insurer investment portfolios and actuaries’ roles in product development, valuation, and risk management, the Academy formed the LPC Investment Analysis Subcommittee in 2023 to monitor investment trends for the life insurance industry to assess actuarial implications. As competitive and profitable insurance products are increasingly reliant on the performance of increasingly complex investment portfolios, it struck me that the industry could benefit from a forum such as the Society of Actuaries’ (SOA) ReFocus, but focusing on investments.

In addition to being a unique forum to provide an opportunity for networking among insurance company executives and investment managers, we have arranged discussions with industry leaders on such investment focused topics as private ABS, liquidity risk, and investment strategies for cross-border reinsurance structures. And, everyone should plan to stay to the end for the regulatory panel. We are excited to have regulators share their insights and perspectives about what it means to manage assets in a regulated industry and the current and anticipated issues that are on the regulatory agenda.

The summit is being presented by the LPC with the goal of bringing together leaders from across the insurance sector—who should come to this event, and why?

We are targeting insurance company C-suite executives, as well as investment managers, to facilitate an opportunity for them to connect, discuss potential investment management agreements (IMAs), and to engage in lively discussions with our panelists about investment-related hot topics like investment trends and ALM against long-dated liabilities.

Generally speaking, what are some of the top issues in asset or investment management that will be discussed?

Perhaps the hottest topic in the industry globally is cross-border reinsurance. Among the benefits of cross-border reinsurance are the investment opportunities such transactions have created for U.S.-based insurers. We have arranged an incredible panel representing all perspectives (insurer, asset manager, and legal) involved in the negotiation and structuring of cross-border reinsurance treaties. Academy President-Elect Tricia Matson will moderate this session.

Given the long-duration nature of many insurance liabilities, illiquid assets present an opportunity for additional spread; however, such investments require an understanding of the ALM implications. Our session on liquidity risk will focus directly on the risks and opportunities of illiquid assets in an exploration of capital management’s role in the investment decision process.

Another key issue for the industry is the seemingly endless supply of new structures being offered to insurance companies looking to increase portfolio yield while managing within defined risk tolerances. We will have portfolio managers from Barings and Oaktree Capital on a panel sharing their insights on private ABS, as part of a broad discussion of Asset Based Finance.

What regulatory developments do you believe will have the most significant impact in the coming year(s)?

Following the lead of Actuarial Guideline 53 in providing transparency into insurer portfolios, I expect that the Actuarial Guideline focusing on Asset Adequacy Testing for cross-border reinsurance will provide transparency for regulators into the nuances of asset-intensive reinsurance transactions. This transparency may enable regulators to distinguish between those transactions that actually benefit policyholders without increasing risk to them and those that may benefit other stakeholders while increasing risk for policyholders.

What outcomes would you like to see emerge from this event?

I’m looking forward to the summit successfully leading to:

• Investment firms and insurance companies making connections to form new investment management relationships and strengthening existing relationships.
• Attendees from investment firms gaining a better understanding of what it means to manage assets in a regulated industry.
• Insurance executives gathering insights into current trends and a better understanding of their portfolios to ask their investment managers more informed questions.
• Eliciting excitement and interest by attendees to attend next year and making it a must-attend annual event.

What needs does this event meet for the broader insurance industry?

The summit is intended to provide a forum for insurance company executives and investment managers to collaborate and explore potential partnerships in addition to learning about the latest trends in the industry and hear from some of the top regulators about the areas on which they are most focused. The summit is really intended to help fill a gap and leverage the Academy’s ability to be a convener – pulling together all the players, encouraging collaborative and productive conversations, with the underlying message that having actuaries at the table and part of the conversation is the best way to ensure that we’re aware of the policy and practical implications of what is happening within the market and within the industry.

What is the current state of play for insurance investments?

Insurance investments today reflect cautious optimism amid inflation and interest rate changes, geopolitical risks, increasing regulation, a shift toward alternative assets, and a continuing trend to outsource investment management. The summit will explore these shifts bringing insurance company executives and asset managers together to tackle challenges and seize opportunities.

 

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Academy, LPC Present at NAIC Spring Meeting

Academy volunteers and staff, including the Life Practice Council (LPC), presented at the NAIC Spring National Meeting in Indianapolis in late March.

President Darrell Knapp represented the Academy—including giving updates on the Committee on Qualifications and the Actuarial Board for Counseling and Discipline—and Actuarial Standards Board (ASB) Chairperson Kevin Dyke gave an update on ASB activity to NAIC actuarial task forces, including the Life Actuarial (A) Task Force (LATF). Academy committee representatives also gave updates and briefings to NAIC committees and working groups on various Academy projects.

During LATF, Academy Director of Research Steve Jackson and EY’s Angela McShane gave an update on VM-22 and Director of Public Policy Outreach (State) Katie Dzurec presented the LPC update. C1 Subcommittee Chairperson Steve Smith gave an update to NAIC’s Risk-Based Capital (RBC) Investment Risk Evaluation (E) Working Group on its work determining comparable attributes of collateralized loan obligations (CLOs). C3 Subcommittee Chairperson Rick Hayes and Vice Chairperson Maambo Mujala presented an update to NAIC’s Life RBC (E) Working Group on its work on C3 alignment with the other RBC c-factors.

Also of note in Indianapolis was the first in-person meeting of the NAIC’s new Risk-Based Capital Governance Model (EX) Task Force. The Academy offered a joint practice-council comment letter earlier this month in response to the task force’s inaugural charges, and has a joint presentation to the task force planned for early April. Dzurec offered comments to the task force during an earlier conference call, as well as in Indianapolis, reinforcing the Academy’s willingness to work with the commissioners and the task force as they begin their work.

Keep your eyes peeled for the regular Academy post-NAIC meeting recap webinar, coming in early April, as well as an Actuarially Sound blog post.

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Volunteers at the 2024 Hill Visits

Cross-Practice ‘Hill Visits’ to Include LPC Volunteers

The Academy will hold its annual “Hill Visits” next week. As in past years, a group of active volunteers will head to Capitol Hill in Washington, D.C., April 2–4 to meet with federal lawmakers and congressional staff.

This year’s visits will be a joint practice-council event, with volunteers from all five Academy practice councils—including the LPC—visiting Senate and House congressional offices. Focusing on key committees and staff, the meetings will spotlight the Academy’s priority public policy and professionalism issues.

The meetings serve as a great reminder to elected officials and their staff of the expertise that the Academy and its volunteers bring to public policy discussions. Actuaries are a necessary and trusted resource, particularly as Congress evaluates and considers proposals to solve some of the nation’s biggest challenges in life and other practice areas.

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NGE Subcommittee Releases ASOP No. 2 Practice Note

The Non-Guaranteed Elements Subcommittee (NGE) released a public policy practice note, Actuarial Standard of Practice (ASOP) No. 2: Non-Guaranteed Elements for Life and Annuity Products, examining the circumstances in which insurers have the right to exercise discretion to prospectively change a non-guaranteed element to be within the scope of ASOP No. 2. It asks, and answers, a series of questions about the ASOP, including its scope, key definitions, policy issues, and offers key applicable examples.

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Save the Date for November’s LHQ Seminar

Save the date for the Academy’s Life and Health Qualifications Seminar, to be held November 17–20 at the Hyatt Regency Crystal City in Arlington, Va. Earn up to 27 hours of continuing education (CE), including professionalism hours. Early registration, with discounts available, will open soon.

New this year—Starting in 2025, attendees will be asked to select either a life or health track. Each will begin with a common day of general education; after that, the two tracks will continue with separate tracks of interest to each practice area. For the optional fourth-day exam, attendees can take either the life or health exam—a combined life/health exam will not be offered.

“Based on attendees’ feedback, the Academy decided to separate the tracks for life and health actuaries, to better fit their professional needs,” said Academy President Darrell Knapp, who is also chairperson of the LHQ Seminar Subcommittee. “The program will also include professionalism presentations applicable to all practice areas.”

The annual LHQ Seminar is considered to be the best way to get basic education or relevant CE to qualify for issuing statements of actuarial opinion for either the NAIC Life and Accident & Health Annual Statement or the NAIC Health Annual Statement.