Insurance in Financial Services UK

Reinsurance under IFRS17 – are you addressing the tax issues?

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Many insurance businesses are struggling with the treatment of reinsurance held under IFRS17.  Much of the struggle is to understand the accounting implications, but there are a number of tax issues that businesses should be addressing at the same time.  This highlights the importance for businesses of making a place for their tax team within the leadership of the IFRS 17 implementation project. 

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Posted on 24/08/2018 | 0 Comments

London calling: how the Risk Transformation Regulations can facilitate the next generation of ILS

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In December 2017 the Risk Transformation Regulations were passed, enabling the incorporation of Insurance Linked Securities (ILS) vehicles in the UK for the first time. So far there have been 2 issuances (a collateralised reinsurance vehicle for Neon syndicate and a cat bond for SCOR), with rumours of many more in the pipeline.

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Posted on 08/08/2018 | 2 Comments

De-risking IFRS17 technology delivery – more collaboration; less complexity

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As someone who has delivered systems changes in finance and actuarial teams for insurance clients for over two decades, I have mixed feeling following the firming up of the IFRS 17 rules and deadlines.

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Posted on 30/07/2018 | 0 Comments

Innovation and data privacy: the ICO’s technology strategy 2018-21

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New technologies and evolving business models have required regulators to review their capabilities and respond to new risks posed. And the UK Information Commissioner’s Office (ICO) is no exception. The new General Data Protection Regulation (GDPR) has vested considerable powers to the ICO to regulate and supervise data privacy risks. Increasing concerns about the wholesale use and processing of personal data by firms are reflected in the ICO's recently published Technology Strategy, which outlines its objectives and focus areas through eight technology goals.

The ICO strategy’s leitmotif is that technological advances “need not come at the expense of data protection and privacy rights” and that “privacy and innovation are not mutually exclusive”. Through the development of its technology strategy, the ICO’s overall aim is to remain relevant by ensuring that the monitoring and understanding of technological change, and its impact on information rights, are a core component of its work going forward.

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Posted on 10/05/2018 | 0 Comments

Open-Source or Proprietary Software for Credit Risk: It’s all about asking the right questions

Open source

It is no secret that technology and its impact on companies’ business models is shaking up the general market. Technology disruption isn’t limited to media, retail, or transport (to name a few industries), but this disruption is widespread, also impacting financial services. The general theme is that technology enabled companies can execute quicker, cheaper and with greater precision.

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Posted on 25/04/2018 | 0 Comments

PRA Business Plan 2018/19

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The PRA published its Business Plan for 2018/2019 on 9 April 2018. The Business Plan, structured around the PRA’s eight core strategic goals, is cross-sectoral, outlining the work the PRA intends to undertake for the upcoming year across both banking and insurance sectors.

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Posted on 17/04/2018 | 0 Comments

FCA’s Business Plan 2018/19

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This blog provides an overview of the FCA’s 2018/19 Business Plan. It discusses the key cross-sector priorities the FCA identifies and compares them to those in the previous year’s business plan, noting dropped, changing and new priorities. It also outlines the FCA’s sector priorities for 2018/19.

Alongside the business plan, the FCA also published its 2018 Sector Views – the FCA’s annual analysis of how each sector is performing – covering retail banking, retail lending, general insurance and protection, pensions and retirement income, retail investments, investment management and wholesale financial markets.

Notably, the UK’s withdrawal from the EU is called out as a top priority, over and above any cross-sector or sector priorities. The FCA notes that they will have to dedicate extra resources to this programme of work, and that this will mean reduced activity in other areas as a result.

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Posted on 17/04/2018 | 0 Comments

FCA and PRA business plans: technological innovation remains a priority

Technological innovation remains a priority

Technology and innovation (“FinTech”) again featured prominently in this year’s Financial Conduct Authority (FCA) business plan. Andrew Bailey, Chief Executive of the FCA, remarked that “technology is supporting competition, transforming markets and changing the way consumers engage with them. […] creating a conveyor belt of risks and opportunity”. Given this, and despite the need for the FCA to dedicate a significant proportion of its resources to the UK’s withdrawal from the EU, FinTech was confirmed as a key priority for the FCA over the coming year. The two specific FinTech priorities highlighted in the business plan are: Innovation, big data, technology and competition and Data security, resilience and outsourcing.

The Prudential Regulation Authority (PRA)'s emphasis on technological innovation in its business plan is relatively less pronounced. Nevertheless, it too is exploring ways to innovate as a regulator, by continuously monitoring FinTech developments, and supporting the authorisation and supervision of new banks and insurers.

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Posted on 16/04/2018 | 0 Comments

AI in financial services - Highlights from the IFGS18 roundtable

AI in financial services - Highlights from the IFGS18 roundtable

Deloitte and UBS[1] hosted a roundtable on Artificial Intelligence (AI) at the recent Innovate Finance Global Summit 2018 (IFGS18). We had representatives from across the FinTech ecosystem covering incumbents, start-ups, scale–ups, consultants and other service providers.

AI is clearly a hot topic and there are a number of challenges and opportunities to explore. We chose four key themes, crowdsourced from experts in the area:

  1. Navigating the hype
  2. Bias and transparency
  3. Collaboration
  4. Role of the regulator

After a lively discussion, we used a voting system to identify the top messages by theme. The messages that earned the highest number of votes are summarised below.

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Posted on 13/04/2018 | 0 Comments

What do we know about the UK's post-Brexit approach to financial services regulation?

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The Government’s recently published response to the House of Lords European Union Committee Report “Brexit: The Future of Financial Regulation and Supervision”1 gives us part of the answer to this question.  Much of it confirms what was already known or widely expected.  The UK will remain a strong proponent of, and adherent to, global regulatory standards, including those set by the Financial Stability Board and the Basel Committee on Banking Supervision.  The UK regulators will continue to adopt a proportionate approach to the application of regulation, with the Government welcoming the PRA’s “proportionate application of Basel rules”.  And the Government and regulators will ensure that regulation supports innovation, including through fintech.

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Posted on 05/04/2018 | 0 Comments