2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009
description
Transcript of 2009 Seminar for the Appointed Actuary Colloque pour l’actuaire désigné 2009
2009 Seminar for the Appointed ActuaryColloque pour l’actuaire désigné 2009
Canadian Institute
of Actuaries
L’Institut canadien desactuaires
PD -2 (Life)
The Actuary and Changing Times
John Brierley
RBC Life Invested Assets
AAA Government Bonds
AA Corporate Bonds
AA Government Bonds
AA Corporate Bonds
A Government Bonds
A Corporate Bonds
BBB Government Bonds
BBB Corporate Bonds
BB: Government
BB Corporate Bonds
Equities/Futures
Commercial Mortgages
Loans on Policies
Cash & short term
RBC Life Liabilities
Non-Par Life
Universal Life
Individual Health
Group Life and Health
Annuity
Participating Life
Segregated Funds
RBC Insurance
Canadian LifeCanadian Home and AutoCanadian TravelUS LifeUS TravelInternational Reinsurance
RBC
Bank Insurance
Impacts
• Asset Defaults: – None in Canadian Life– Minor elsewhere in other insurance
• Equities:– Very small segregated fund portfolio– Material impact in traditional life
• Disability:– Less impact than expected from an economic
downturn
Impacts
• Lower interest rates– Provide for 50% excess credit spread– Keeping ahead of ultimate
reinvestment rate reductions– Looks a lot like last year’s DCAT
adverse interest rate scenario• Asset Extension
– Better matching generated liability reductions in CALM
Impacts
• Small income impact from volatility in the Initial Reinvestment Rate:– Market value change on excess HFT
assets tends to offset much of the impact of IRR changes
• Quarterly income volatility from equity assets held in the general account
Impacts
• Investment Restrictions:– Tight money lending conditions– Asset sector limits– Limitation on commercial mortgages
Impacts
• Universal Life– Less change in policyholder behaviour
than expected• Deposits still being made• No significant difference in fund transfers
or partial surrenders• Policy lapses not significantly impacted
Summary
• No impact from asset default• Equity market downturn noticeable• Providing for lower interest rates• Disability experience slightly adverse• Universal Life neutral• Asset extension favourable to income• Limitations in asset choices
• “not really that bad a year”