Subscription-based primary care: Key product design considerations
We outline key product considerations for those designing, developing, managing, or purchasing primary-care subscription-based products.
Life insurance companies face multiple risks that evolve over time and they must hold capital as a buffer against these risks. Capital management is an increasingly important topic for insurers as they look to find ways to manage their risks and the related capital requirements and to optimise their solvency balance sheets. Given the traditionally long-term nature of the insurer’s liabilities, effective capital management can be complex. Insurers may face capital pressure due to their solvency coverage levels, shareholder demands, regulatory concerns, etc. Capital pressures have increased for many firms in recent years due to the continuing downward trend of interest rates to historic lows.
Reinsurance is one of the key capital management tools available to insurers. Several reinsurance structures are available, each with its own advantages and disadvantages, and requiring experience and expertise to make optimal decisions. We have therefore prepared this research paper exploring a range of reinsurance strategies that could be utilised by life insurers for capital management purposes. We investigate more common reinsurance strategies along with new developments and innovative strategies that could be implemented by life companies.
We have used our own experience and expertise across Milliman, as well as discussions with a range of reinsurers, in order to determine the strategies to include and the considerations to focus on. We would like to thank these companies for their participation in our study. We have written this paper from a life insurer’s perspective.
Below is an infographic that highlights the key areas of consideration for evaluating reinsurance strategies.