Nicola Kenyon, Head of Insurance Investment and ALM at Hymans Robertson talks about the firm, innovation, and predictions for the sector in the future.
Tell us about your firm and what makes it different from others in your sector? When, how and why was Hymans founded?
Hymans Robertson LLP is an independent partnership founded over 100 years ago. We help to build better financial futures for millions of people across the UK by providing consulting services to organisations across pensions, investments, insurance and financial services.
We work in partnership with our clients to deliver a bespoke, high-quality service. Our purpose – together, building better futures – is at the heart of what we do. We are dedicated to building a sustainable future now and for generations to come. We strongly believe that our purpose is what truly differentiates us from others.
How might other members and/or their clients benefit from your services?
We take a friendly and straightforward partnering approach to what we do. We support funders of Equity Release Mortgages (ERMs) (mostly Bulk Purchase Annuity providers and large pension schemes) in a number of areas including:
· Effective risk management frameworks
· Risk analysis for actuarial assumptions
· Designing and implementing ERM securitisation structures including optimising Matching Adjustment (MA) and Solvency Capital Requirements (SCR) requirements
· Regulatory applications and engagement
· Developing and validating ERM valuation and capital models
Our work in ERMs is highly varied, reflecting the nuanced needs of our clients. We are always open to speaking to existing funders or potential new funders about ways in which we could support them.
Why did Hymans join the council?
The financial resources available to retirees have changed and continues to do so as the economy and the retirement savings market evolves. Equity release is one way of helping individuals to fill gaps in their income needs. Hymans Robertson’s decision to join the council is based upon our desire to support ERM funders in helping to meet those needs.
We look forward to helping drive innovation in this area. Our efforts will be to work with the ERC and its members to help individuals unlock property wealth in a safe and appropriate way.
What are the greatest opportunities and challenges facing your firm at the moment?
The UK insurance industry is awaiting the finalisation of the new Solvency UK regulatory framework. Part of Solvency UK’s aims is to increase investment flexibility for annuity writers, potentially paving the way for firms to fund new innovative lending products. This, coupled with continued economic and political uncertainty, the emerging retirement savings gap, and climate change presents challenges and opportunities for the industry.
A lot of our work at Hymans Robertson is centred around helping clients to understand how these challenges and opportunities impact their business strategies. For example, we’re supporting a number of clients to rethink their risk management processes and product ranges in order to help better meet customer needs.
Where do you see the firm in 5 years’ time?
The bulk purchase annuity (BPA) market is expected to see over £50bn of liabilities transfer from pension schemes to insurers every year for the next few years*. The availability of suitable investments to back this business – including ERMs – will continue to be vital.
In five years’ time, it is possible that Defined Contribution (DC) pension savings will be dominating retirement conversations. It would seem likely that there is potential for new funders to enter the ERM market, alongside the development of innovative new product features that will be vital for supporting the changing needs of these retirees.
Hymans Robertson looks forward to continuing to work with our clients – both old and new – to help understand, fund, and risk manage such innovations, alongside our broader, actuarial work.
* Risk Transfer Report 2024 | Hymans Robertson
Disclaimer:
This communication has been compiled by Hymans Robertson LLP, and is based upon their understanding of legislation and events as at date of publication. It is designed to be a general information summary and may be subject to change. It is not a definitive analysis of the subject covered or specific to the circumstances of any particular employer, pension scheme or individual. The information contained is not intended to constitute advice, and should not be considered a substitute for specific advice in relation to individual circumstances. Where the subject of this document involves legal issues you may wish to take legal advice. Hymans Robertson LLP accepts no liability for errors or omissions or reliance on any statement or opinion.
Hymans Robertson LLP (registered in England and Wales – One London Wall, London EC2Y 5EA – OC310282) is authorised and regulated by the Financial Conduct Authority and licensed by the Institute and Faculty of Actuaries for a range of investment business activities. A member of Abelica Global. © Hymans Robertson LLP.
- The views of contributors are not necessarily shared by the Council
