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Related Insight

• Operational risk modelling
• Life Insurance Stress Test 2022: Second and final request for technical input

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Webinar Chair:
John Jenkins

Retirement Income – A Bridge Over Troubled Water
Neil Dissanayake & Russell Ward

For those entering retirement, drawdown remains a very popular option to provide income for the early years, with the added certainty of annuitisation often seen as a logical step in later life. However, the flexibility and freedom of drawdown comes with exposure to significant risks which must be navigated, in particular investment related risk.

In this session, we share some insights from a recent Milliman survey which explored the attitudes of pension professionals to the mitigation and communication of some of these risks. We will then also explore different approaches to consider in establishing a sustainable income level, and reviewing that throughout the drawdown period.

LIST - Life Insurance Stress Test 2022
Jessica Crowson & Florin Ginghina

In January 2022, the PRA launched the second and final request for technical input for the Insurance Stress Test (IST 2022). The Life Insurance Stress Test (LIST 2022) is due to be launched in May of this year, with responses required to be submitted by September.

In this session, we will provide an overview of the requirements and instructions for LIST 2022, along with some considerations for specific areas such as management actions. We will then share the results of a high-level analysis we have undertaken to quantify the impacts for the four stages underpinning LIST 2022, and we will provide our views on some potential challenges for firms completing the exercise.

Operational Risk Modelling
Adél Drew & Tatiana Egoshina

The traditional view of risk is based on an idea that there is a cause, which may lead to a risk event, with a resultant effect. Most risk managers are taught this traditional approach. As such, it's not surprising that frequency-severity modelling is the standard method for modelling operational risks.

However, there are some aspects of the frequency-severity modelling approach that make the technique more of an educated guess at the operational risk figure and not necessarily reflecting the current company's actual risk profile, particularly given the complex nature of the modern business environment.

In this presentation Adél Drew and Tatiana Egoshina present the results from a recent Milliman operational risk modelling paper on this topic. In addition to discussing the shortcomings of frequency-severity modelling, they also explore how causal modelling can overcome some of these issues.