Chapter 2: Stakeholders Flashcards
Stakeholders involved in a pensions scheme
- members
- members’ dependents
- trustees
- shareholders of the sponsor
- directors of the sponsor
- employees of the sponsor
- auditors
- regulators
- the government
- administrators
- investment fund managers
- creditors
Interests of policyholders
Protection against death, sickness, unemployment and protection of property, investment and savings.
Interests of the board of directors of an insurance company
- Pricing
- Provisioning
- Ensuring benefits are paid
- Managing assets and liabilities
- Meeting legislation
- Obtaining adequate reinsurance
- Corporate governance
Interests of shareholders
Obtaining a return commensurate with the level of risk taken.
Interest of creditors
Ensuring monies owed will be paid.
Interests of auditors
Assessment of long-term liabilities
Interests of regulators
Ensuring regulatory requirements are met.
Interests of the members of pension schemes
Provision of benefits on
- death
- retirement
- illness
- withdrawal
Interests of trustees
- Paying benefits when they fall due
- managing assets
- maintaining solvency
Interests of sponsors
- Provision of retirement and protection benefits to meet the needs of members
- Controlling costs
- Meeting legislation
Interests of employers
- Protection against losing employees
- Provision of benefits to attract and retain staff
- Protection of assets
- Meeting legislation
- Controlling costs
- Raising, quantifying and investing capital
Interests of employees
- Provision of retirement and protection benefits
- Savings
Interests of the government
- Setting legislation and monitoring compliance with it
- Funding state benefits and monitoring the funding
How may appetite for risk vary by stakeholder?
The risk appetite will vary by the class of stakeholder
There will will be variation within a class of stakeholders.
The appetite will reflect existing risk exposure and also cultural factors.
Different risk appetites lead to a market in risk transfer
What are the 3 different types of advice an actuary can be asked to give?
- factual
- indicative
- recommendations.
Policyholders
Want product that meets their needs in terms of amount and/or certainty of level of income received
Employees
Success of new product may provide more jobs/ better security
Directors
Poor product negatively affects reputation
Regulator
Want to ensure product is suitable for and understood by policy holders and that the insurer has sufficient capital to support it
Reinsurers
Interested in providing reinsurance appropriate to the design of the new product, eg to protect insurer vs longevity risk
Professional advisors
Interested in features of new product and communicating them to their customers
