London

5 Chancery Lane
London
WC2A 1LG
01235 821 160
View map

Edinburgh

1 Lochrin Square
92 Fountainbridge
Edinburgh
EH3 9QA
01235 821 160
View map

Dublin Office

77 Lower Camden Street
Dublin 2
Ireland
D 02 XE 80

View map

Administrative Office

BH Office
Church Street
Ardington
Wantage
Oxfordshire
OX12 8QA
01235 821 160
View map

Send us a message
CLOSE X
Contact Us
16.03.2022

Key Drivers of Client Demand

This article discusses the key current drivers of demand for APR’s services, as well as touching on some that have the potential to be key drivers in the near future. Much of this focusses on the drivers within Life insurance, however a few of the points are also pertinent to GI, in particular the macro impacts covered towards the end of the article.

If you require additional support on any of these topics (or anything else!), whilst our immediate availability of staff is currently tight, emerging availability in summer is healthier and we would encourage you to touch base with us as soon as possible regarding this arising capacity.

IFRS17

Now that the effective date for the IFRS17 standard (January 1st 2023) is seemingly set in stone and we’re racing towards it, we’re seeing a high number of requests from clients looking to supplement their project teams for the final push. The implementation delays were appreciated by most and gave firms more time to finalise their methodology, so the focus of the requests we’re receiving are now much more around process implementation, documentation and supporting the transitional calculations required for the comparative position in the initial IFRS17 balance sheet. Much of this suits the core skillset of an APR staff member well, and this has translated to particularly high demand for those at a mid to senior student level. We anticipate support to be required through the remainder of the year and into early 2023, although expect that new opportunities may start to decline after Q2 when most firms will have identified any additional needs they have. An overall observation is that IFRS17 has not led to the same peak demand – and consequently hike in market rates on the interim contract market – compared to the advent of Solvency II.

Finance and actuarial transformation

Whilst the size and shape of individual firms’ transformation ambitions are different, many of our clients have embarked on the path of change and it’s not just shareholder-owned businesses who want to improve how they operate. Many of these programmes appear more genuinely transformative than previous iterations and, instead of seeking improvements in working day timetables, the harnessing of vastly improved data processes, robotics and artificial intelligence can lead to genuine opportunity for change. This highlights one major theme of recent actuarial transformation; the utilisation of technology to create space for actuaries to move away from handle turning and focus instead on value-add tasks such as understanding and explaining the movements in the areas of greatest focus.

M&A activity

Consolidation in the UK and Irish insurance space continues and it would be a brave person that would bet against a continuation of this trend. Even before the pen has dried on the deals themselves implementation planning is in full swing and, once the transaction is completed, the key skills in demand are often similar to those required for systems or data migrations.

Major model change applications

A steady driver of demand for APR’s services over the last couple of years has been supporting clients going through major model change applications. This has included those necessitated by M&A activity as well as those due to methodology reviews in light of changing industry practice and the after-effects of the pandemic. As many of you will be aware, compiling a major model change application is no mean feat! As a result we have seen many opportunities requiring a range of technical and key organisation and management skills, from supporting the project teams directly via secondment, to documentation review and application governance support, typically via a deliverables-based consulting arrangement.

Other regulatory changes

We’ve discussed IFRS17 above but, looking forward, there is further regulatory change on the horizon – not least the impending review of Solvency II, with HM Treasury due to release a consultation on their proposed changes following the PRA’s consultation and QIS last year. Some of the headline proposals were released as part of the Economic Secretary to the Treasury’s speech to the ABI last month, but much of the detail is still to come. The HMT consultation is due to be released in April, with a more technical consultation coming from the PRA later in the year. Bearing that in mind, as well as it not being clear when these changes are likely to be proposed for implementation, we’d expect that once these finer details are known there will be a reasonable amount of work to be done, particularly for life insurers, leading to further demand for our services, either through directly working on any projects created to implement the changes or back-filling client staff to free them up for such work.

While we’re yet to see direct opportunities coming out of this to date, another regulatory change to be aware of in 2022 is the introduction of the FCA’s new Consumer Duty Principle. The aim of this is to “fundamentally shift the mindset” by ensuring that good customer outcomes are at the centre of businesses and that firms focus on the diverse needs of their customers at every stage. While many insurers may argue that this is their focus already, when the rules are announced (expected by the end of July), there will likely be new processes that need to be implemented and evidenced, particularly around the information provided to consumers, which we expect may lead to additional support being required in impacted departments over the implementation period.

Macro impacts

Drivers of demand can find their roots well beyond the insurance industry. A current example is the move across the industry to shared parental leave policies; such changes are welcome on many levels but the flexibility they provide can lead to additional resource planning complexities. Likewise, after almost two years of COVID and relatively low recruitment churn, the actuarial recruitment market has gone somewhat into overdrive; many of our clients and indeed ourselves have felt the impact of this. All this can lead to higher demand from clients for interim support to their teams.

Ross Gordon

March 2022