Living benefit riders to life insurance policies: Pricing considerations and strategy
Adding benefit riders to policies provides meaningful coverage for those who need it, and carriers usually can do so at a relatively low cost.
On July 20, the Prudential Regulation Authority (PRA) launched its Quantitative Impact Study (QIS), covering the review of Solvency II in the United Kingdom. This briefing note gives an overview of what is expected of firms to completing the voluntary QIS exercises, due in October. The paper provides insight into the key considerations and potential challenges for firms, in areas such as sensitivity testing, scenario specifications, risk margin, matching adjustment, credit spread and downgrade sensitivity, the transition from the London Interbank Offered Rate (LIBOR) to Sterling Overnight Index Average (SONIA), and transitional measure on technical provisions (TMTP).
The PRA QIS Exercise: What does it cover and what will it mean for firms?
While the PRA stresses QIS should not be viewed as policy proposals, firms should consider the impact the exercise could have on their balance sheets.