Gentlemen, on the present occasion I propose to submit to you a few remarks upon the business aspects of our work, and some of the circumstances on which the prosperity of a life insurance office depends. In the first instance, it may be useful to examine what is the real importance of life insurance to the country; and for this purpose I will take some of the figures which are now available by means of the returns made in pursuance of the Act of 1870, and compare them with other figures relating to the position and progress of the country. It appears from the Board of Trade returns that the income and assets of the life offices are steadily, not to say rapidly, increasing; the total income of the British life offices having increast from nearly 14½ millions sterling in 1871 to over 22 millions in 1884. The total life funds of the same companies now amount to about 140 millions, the increase of the funds since 1871 having been over 52 millions. These are very large figures, and they prove that the business in which we are engaged is a very important one. If, however, we confine our attention to them, we shall perhaps conceive an exaggerated idea of the importance of our business; and I will therefore compare them with the figures relating to some other industries. Thus I find it stated in the Statesman's Year-Book that the value of the total imports into the United Kingdom in the year 1883, was nearly 427 millions sterling; and the value of the exports of British produce about 240 millions; the largest articles of import being corn and flour of the value of about 67½ millions, and the largest item of export being cotton manufactures of the value of about 76½ millions.

Decumulation Pathways are proposed to help achieve better retirement outcomes for those with Defined Contribution (DC) pensions. The DC fund is split into two parts, in proportions of the consumer’s choice. Most is allocated to the Pension Fund to provide a lifetime income, while the rest is placed in the Flexible Fund for flexible access and/or to leave as a legacy. The Flexible Fund is invested in flexi-access drawdown. The Pension Fund is invested in a guaranteed annuity, Collective Defined Contribution, or a Pooled Pension Fund which maintains individual DC funds but pools longevity risk between participants. An illustrative standard Decumulation Pathway is intended as a default solution, or can be tailored by the consumer. It uses the Pooled Pension Fund, an automated withdrawal strategy which ensures a lifetime income is provided and one that aims to increase in line with inflation, and a moderate risk investment strategy. The standard approach is evaluated using various metrics, indicating that it has as a strong chance of providing a higher income than could be obtained from an annuity or drawdown, with limited downside risk.

Increasing global concern over the impact of climate change has recently led to public scrutiny over the adequacy of existing risk management practices by insurance companies and pension schemes in dealing with these challenges that potentially impact both individual actuaries and the Institute and Faculty of Actuaries generally. Most recently, the Prudential Regulation Authority has issued further guidance concerning its expectations for the UK insurance industry regarding the development of an approach to disclosure on and management of the financial risks from climate change, while a Parliamentary Committee has demanded public clarification from UK pension scheme trustees regarding their degree of engagement with incorporating climate-related financial risks into their investment decision-making. The aim of this paper is to identify the dominating factors of the current evolvement of UK insurance companies’ and pension schemes’ climate risk disclosure practices. This paper analyses both the nature and extent of changes in the risk reporting practices of these entities that have evolved in order to meet these demands for increased accountability. We first analyse relevant sections of latest annual reports produced by a sample of 15 UK insurance companies and 15 pension schemes. We find only limited alignment of insurance firm and pension scheme annual reports with the 11 specific Task Force on Climate-Related Financial Disclosure’s (TCFD) recommended disclosures. We also examine what key financial risk and/or other organisational characteristics are most closely associated with the degree of alignment with TCFD specified disclosures related to governance, strategy, risk management and performance metrics. We find that incentives facing sample insurance companies to align their climate-related disclosures with TCFD recommendations are related to their management of reputation risk (measured on the basis of size and type of business). Whereas the incentives facing pension schemes are related to the desire to reduce information asymmetry (measured by liability risk) among their stakeholders concerning this issue. Further, consistent with a stakeholder theory explanation, it appears that only a minority of large, publicly listed insurance companies and large local government pension schemes are taking action to report on their actions to mitigate climate risk. We also discuss examples of best practice climate risk reporting. The implications for the actuarial profession in engaging with climate risk are discussed in line with the findings of the study.

This paper highlights how actuarial thinking could contribute to the development of a justice perspective relating to biodiversity risks and also the implications for actuarial work. The impact of biodiversity loss as well as the use of ecosystem services is not equally distributed across society (both intra and inter generationally). The Biodiversity and Natural Capital Risk Working Party has been setup to proactively take forward a series of activities including think pieces, webinars and external engagement on these risks.