With-profits funds

While market sentiment and investment performance have generally led to with-profits funds becoming seen as less attractive for new business and capital in recent years, there remains a group of customers who like the guarantees and risk-sharing mechanisms they offer.

Regardless of the new business picture, regulatory, valuation and governance changes over the last 10 years mean that the burden of managing existing funds is high and unlikely to reduce. This is because the modern emphasis on risk management, as opposed to risk measurement, applies as much to with-profits companies as to the rest of the insurance industry. This will require continued development and embedding of models. The demands placed on companies could lead to further consolidation within the sector.

Towers Watson has been at the heart of the UK with-profits industry for many years, working with clients throughout the business life cycle from new product development to the establishment of run-off plans. We are a leading provider of statutory actuarial roles and of outsourced actuarial services, assisting clients in a range of areas that includes:

• Risk appetite and hedging strategies
• Independent expert work
• Capital management
• Run-off plans
• With-profit actuary and actuarial function holder roles
• Management action reviews
• Strategic options including fund restructuring
• Business transfers
• Outsourcing arrangements
• Advice on the distribution of inherited estate
• Regulatory interpretation, including Solvency II
• Modelling techniques
• Governance
• Mergers and acquisitions