Life Conference 2024: A Journey Through Workshops, Plenaries, and Chocolate Mousse Cups

Manchester – the city that gave us Oasis, the National Football Museum, and, for three glorious days in October, Life Conference 2024. The conference saw actuaries from across the country flock together to discuss the key themes/topics in the life insurance industry, network in the brief respites between workshops/plenaries, and join the ‘freebie’ queue at key exhibitors’ stalls (highlights this year included made-to-order coffee, sensational notebooks/pens, and some outstanding caricatures).

For those who weren’t lucky enough to attend we’ve put together this article to break down the key themes and takeaways from the conference. From the latest in AI developments to the terrifying realization that we’re all going to live way longer than we planned for (assuming mortality trends recover), read on to discover more!

The Structure of Life Conference

The conference was a three-day collection of talks, discussions, and lunches. Plenaries were open to all delegates, and varied in their topics, from IFoA Professional Skills through the latest in Climate Change observations all the way to Timandra Harkness’s Edinburgh-fringe show (fourteen years later, but still a huge crowd-pleaser, despite some potential flaws in her analysis).

Workshops were 45-minute sessions which included a presentation and dedicated Q&A time. There were only eight time-slots during the conference for workshops, so delegates had the unenviable task of choosing the ones which most interested them. The workshops covered everything from Solvency II changes to deforestation impacts and DIY AI-powered chatbots, with a wide range of options for actuaries of all fields of interest.

In between these core sessions were a variety of things ranging from exhibition time, usually accompanied by lunch or snacks, to an IFoA Town Hall session. There was also a formal meal on the first night.

APR’s diligent team dived into these workshops headfirst, armed with freshly printed notebooks and a deep-seated desire to answer the question: “Just how many slides is too many?” (You can never have too many slides).

So, what were the big takeaways from this year’s conference? Let’s dive right in!

Key Themes

1. Artificial Intelligence: When Will the Machines Rise?

If you attended any workshops at this year’s conference, the chances are you heard the acronym “AI” thrown around, I don’t know, 100 times. The rise of AI has been a buzz-topic of previous conferences, as well as GIRO, the General Insurance equivalent, and this was no exception. AI as a tool promises to revolutionise the industry, and, as such, has key applications in a wide range of areas.

We discussed topics such as using neural networks to predict medical costs, and Generative AI Agents – a truly terrifying look at what will one day replace us! There was a session on building your own AI-powered chatbot, which, if the general mood was to be believed, will be a crucial skill in the years to come. It’s an exciting area, for sure!

On the more sobering side, though, some of the key drawbacks of AI had to be called into question. For example, the key differences for actuaries between validating a model prepared in the traditional actuarial fashion and a model prepared by AI. It’s important for actuaries to be aware of the additional risks introduced, from the possibility of overfitting and model drift to the age-old black box problem: how can we know something is correct without knowing how it was concluded?

Additionally, key ethical considerations around AI were brought into focus – the fact that AI exhibits a phenomenon called hallucinating, where it might generate a response that is incorrect or fabricated, despite it seeming plausible. It highlighted the sharp need to always check information generated by AI assistants. Thoughts around how AI intersects with bias were provided, and the session highlighted the need for actuaries to consider their professional ethical framework when making decisions around AI solutions.

2. Longevity Trends: Living Long Enough to See the End of Your Pension

One of the key reminders at conference was that we are all still living quite long in retirement. There is a rising demand for good retirement income solutions. While one might think about the contrast between the demand for Defined Contribution and Defined Benefit pensions, a key focus of conference was towards the protection business, particularly around healthcare and social care. The IFoA’s own Social Care Working Party provided an update on the cost of funding for Social Care and highlighted some really eye-opening numbers about social care entitlement. The long-term care (LTC) industry has traditionally been a small market, given its costly nature (and the uncertainty of care length and care cost inflation has driven this further), and the presenters emphasised the current state of affairs is just not sustainable. The Population Health Working Party added to this with a talk on how actuaries can get more involved in shaping the policy of managing the health of our wider population long-term, mitigating the need for care and improving healthcare outcomes significantly.

On the side of this, a good amount of focus was put on underserved communities. In Serving the Underserved, the presenters looked at gaps in coverage within the insurance industry for specific groups, such as lower-income individuals, ethnic minorities, people with disabilities and those in the LGBTQ+ community. Inclusivity in the protection market is particularly important, and a Plenary panel discussion was devoted to talking about how we can provide products and financial education to those who may struggle to provide them for themselves. There was consideration of the role unconscious bias plays in product design and underwriting, noting that traditional risk assessment processes/methods may unintentionally exclude groups that do not account for a more diverse set of needs.

A detailed look at mortality improvements over time, including the impacts of COVID and how its second-order trickle-down effects have continued to worsen mortality over the last few years, was enlightening, especially in light of the current political focus on potential NHS reform.

That said, while the focus was heavily on the industry’s failure to address these issues so far, some talk on the medical horizon, advances in healthcare processes and medicine provided a light at the end of the tunnel.

3. Climate Change

Managing climate change and the associated risks for insurers is a topic that seems to get hotter and hotter every year. One of the key plenaries of the entire conference was about where we now are in terms of climate change, and what the potential impacts to the industry (and GDP) might be per half-degree rise in temperature. There were sessions on key impacts of climate change and associated ESG concerns, such as deforestations risks, and sea level rises. Climate Scenario Modelling made it clear that this is not ‘just’ an environmental issue, that the impact is also financial in a material sense. Insurers are building climate-related risks into their thinking, from the increased impact on mortality risks in general to disruptions in global supply chains. If you thought this was more a concern for Flood insurers at GIRO, think again – the impacts are far too significant to ignore!

Are your Days on the Beach Numbered drove home the point that rising sea levels and the higher incidence of extreme weather events we have observed has knock-on effects on population health, mortality, and migration patterns, giving rise to the need for better predictive modelling techniques, and resilient investment strategies. Insurers are being called upon play a bigger role in promoting sustainability initiatives, whether that is the direct impact of their activities (e.g. travel, staff consumption) or in encouraging better structured investment portfolios in their customers.

While these discussions were wide ranging and some were aspirational rather than actionable directly, it is clear how urgent change is needed, with insurers putting ESG concerns at the top of their long-term thinking.

4. IFRS 17: It’s Here, and It’s Complicated

The long-awaited IFRS 17 implementation was another major theme, and the message was clear: IFRS 17 is no walk in the park. Workshops focused on how insurers are grappling with the complexities of the new accounting standard. Despite sometimes years of preparation time, insurers who have built the necessary systems for IFRS 17 find themselves dealing with issues around scalability and smooth operation. Time was given to the increased need for collaboration between actuaries and finance departments, which can create additional overhead and operational inefficiencies, with this expected to be ironed out over the coming years.

While the drawbacks of a large-scale implementation are clear, there are also opportunities in the post-implementation world. IFRS 17 as a standardised measure has allowed far greater comparability between insurers, presenting a like-for-like picture. This might make the industry more attractive to investment, given increased clarity and transparency. Additionally, insurers should be able to better manage their capital allocation and therefore planning, given the clearer view of how profits are generated over the life of an insurance contract portfolio.

Additional sessions focused on more specific topics, such as the additional complexity of navigating Mergers and Acquisition (M&A) transactions in the new world. For example, a significant difficulty is comparison of firms that are now at various stages of their IFRS 17 implementation process. This is not only a difficulty for valuation purposes (as we are not comparing like-for-like), but also post-M&A, where the merging of two financial systems at different stages may introduce challenges. We also got to look at how IFRS 17 has impacted insurers in the Middle East, where the level of readiness for the new standard has varied across the region. Insurers have been required to make significant changes to their systems, processes, and internal controls, as well as improving data quality materially.

Wherever you operate, though, IFRS 17 is here to stay, and implementation was only the beginning!

Closing Thoughts

Life Conference 2024 left us with plenty to think about. From the existential risks posed by climate change to the nitty-gritty of IFRS 17 compliance, this year’s conference underscored the challenges facing the life sector. But you are not here for that, are you? So, the white chocolate mousse cups. Oh my. Provided in ample quantities, in dainty glasses, across several meals, these little cups of heaven were the true highlight of conference. With a lax approach to regulation almost unheard of in the industry, I was able to snaffle  six of them over one lunch time. If you take anything away from this article, it is that Conference 2025 promises a strong dessert game.

So, whether you were there for innovative AI workshops, developing industry networks, or just lunch, there was something for everyone, as long as everyone works in the life insurance industry (or feels strongly about food quality)!

John Nicholls

October 2024