Keeping up with the market – January 2022

Every month we help you keep up with the Belgian insurance market.

 

Mergers & Buy-out

Octium & Credit Suisse

 

The international and independent insurance group Octium has announced that the acquisition of Credit Suisse Life & Pensions AG is completed. Specialized in the design and distribution of privately managed life insurance products, Octium group has approximately 10 billion euros in assets under management and has around 75 employees.

In 2017, Octium already bought out UBS International Life.Today with the Credit Suisse acquisition, the group is strengthening its international growth and strategic positioning on the European markets.

 

Monument Re & AXA Belgium

AXA Belgium agreed to transfer to Monument Re its run-off life insurance portfolio for 2.6 billion euros of BEGAAP provisions, subject to regulatory approvals. It has been the seventh transaction of Monument Re in Belgium.

Based in Bermuda, the life reinsurer and insurance holding company previously acquired the former insurer Integrale. Manfred Maske, CEO of Monument Re Group and Chairman of MAB (Monument Assurance Belgium) said: “After the closing of the deal with Integrale last week, we are delighted to announce this transaction which fits perfectly with Monument’s consolidation strategy and confirms Belgium as a key target market for us. Following earlier acquisitions of six other Belgian portfolios, this transaction with AXA Belgium continues that trajectory and affirms MAB’s position as the leading consolidator in the Belgian market.”

AXA Belgium & Crelan 

Thanks to the long-term partnership with Crelan and the acquisition of Crelan Insurance, AXA Belgium has reinforced its position on the Belgian market. First, in life insurance through the acquisition of Crelan Insurance, mainly active in the marketing of loan protection insurance. Also in non-life insurance with a long-term distribution agreement with the bank Crelan.

As we mentioned in our previous newsletter, Crelan is looking also to the future. Indeed, AXA has now completed the sale of AXA Bank Belgium (its Belgian banking operations) for 690 million euros to  Crelan. The operational merger of the two entities will take another two more years to be completed.

 

Partnership

Samsung & Bolttech

Samsung and the international insurtech Bolttech expended their partnership to 6 new European countries: the Netherlands, Norway, Sweden, Finland, Denmark, and finally Belgium. Their service was already operational in 7 Asian countries.

The insurance Samsung Care+ covers smartphones, tablets and portable devices against physical and liquid damage.

 

News of the market

Belgium takes stake in Ageas

The Belgian State, through the SFPI-FPIM, has acquired 6.3% stake in the capital of  Ageas to firmly anchor the insurance company in Belgium. After Fosun, the SPFI-FPIM is now the second shareholder of Belgium’s largest insurer. The threat that Ageas would be taken over by foreign investors is now lifted. The Belgian State also puts forward the argument that Ageas owns the subsidiary AG Insurance which plays a crucial role in pensions.
In addition, the Belgian Federal State was very supportive of the SFPI-FPIM’s decision. About the maneuver, Minister Van Peteghem said “The financial sector is one our six strategic investment pillars and we are focused on smartly anchoring companies that are of strategic importance to the country’s economy.”

 

Rebranding: Baloise Insurance becomes Baloise

In the course of the year 2022, Baloise Insurance will change its name to Baloise. This new denomination is part of the Baloise Group rebranding’s strategic plan: “Simply Safe: Season 2”. The aim is to simplify its brands and unify all group subsidiaries under one brand only: ‘Baloise’. For Baloise’s clients, all services and processes are meant to be more accessible and understandable thanks to this rebranding plan and the new marketing strategy.

 

2021: Top 10 most costly disasters in 2021

According to a study published by the British organization Christian Aid, the 10 most costly natural disasters generated damage over 170 billion USD. It is 13% more compared to 2020. As the estimated are based on insured losses only, the actual costs are higher.

Among the top 3, Hurricane Ida comes in the first place. It occurred at the end of August 2021 in the USA and costed 65 billion USD. In the second place, the floods that took place in Germany, Belgium, France, the Netherlands and Luxembourg in July, with damage totaling 43 billion USD of losses. Finally, Winter storm Uri, again in the USA, holds the third place with a total loss of 23 billion USD.

Regarding the flood damage in Belgium, the Disaster fund has received 5,274 case files so far: 40% are related to cars and 35% concern personal property. The application deadline is extended until 18 April 2022.

 

At Work

Top Employers Institute awarded 8 Belgian insurance companies

Every year, the Top Employers Institutes grants the label ‘Top Employer’ to Belgian and International companies with great working conditions and the best HR practices.

Out of 1857 companies, 84 in Belgium stood out. Among them, there were 8 insurance companies: Ageas, AG Insurance, AIG, AXA Belgium, Ethias, KBC(CBC), NN and P&V.

 

 

Sources:

Paperjam, Octium achète la branche assurance-vie de Crédit Suisse

Assuropolis, Le groupe Monument Re reprend le portefeuille Vie en run-off d’AXA Belgium

Monument Re group, Monument Re and AXA Belgium agree the transfer of a run-off life insurance portfolio

Assuropolis, Samsung lance une assurance en Belgique

Assuropolis, AXA renforce sa présence sur le marché belge de l’assurance

L’Echo, Avec AXA Banque dans son escarcelle, Crelan se tourne vers l’avenir

L’Echo, L’Etat belge entre au capital d’Ageas, le titre chute en bourse

Assuropolis, L’Etat belge acquit une participation de 6.3% dans le capital d’Ageas

Assuropolis, Baloise Insurance devient tout simplement Baloise

Baloise, La Baloise simplifie son monde des marques et se positionne pour l’avenir

Atlas Magazine, Top 10 most costly disasters in 2021

Assuropolis, Inondations: plus de 5000 dossiers introduits au fonds des calamités

Assuropolis, Top Employers Institute : huit compagnies d’assurance belges sont distinguées

Appointments in Belgium & Luxembourg – January 2022

Who are the most recently appointed directors and C-levels? January is quiet in terms of nominations.

 

Belfius

(Bram Somers, Belfius)

Bram Somers is the new CTO for Belfius. He has been working at Belfius for 14 years and was responsible, among other things, for Banx, the digital banking application in collaboration with Proximus. As CTO, he now manages around 1,500 employees: 750 internal, 45 external and 300 employees from the joint-venture Pi-Square with Kyndryl.

In addition, Marjolein Sebille is Belfius Insurance’s new CIO. Engineer in Biology, she has been working at Belfius since 2016 and has just taken over Gert Vanhaecht’s previous position.

 

ACA (Luxembourg Insurance and Reinsurance Association)

(Valérie Tollet, ACA)

 

 

 

 

 

 

 

Valérie Tollet is the new ombudswoman at ACA. Her predecessor was Charles Origer who was holding this position since 1997. With her 20-year experience in taxation both in Belgium and Luxembourg, she joined the ACA in 2020.

As a reminder, the role of mediation within ACA is to examine disputes between an individual and an insurance company, related to underwriting, interpretation or application of an insurance contract in Luxembourg and to find an amicable solution.

Marc Hengen, ACA’s Managing Director thanked Valerie “for adding this new role to her existing ACA duties. Valerie is the right person to take on the essential responsibility for re-establishing the dialogue between policyholders and their insurer, because of her integrity, professionalism and commitment.”

 

Sources:

Assuropolis, Bram Somers nouveau CTO chez Belfius

Paperjam, Une nouvelle médiatrice pour l’ACA

What’s next for the insurance sector in 2022 ?

What are the key themes to watch in 2022? The Economic and Financial Division of ING Bank has released its projections. Let’s run through their analysis.

 

  1. Re-risking of portfolios amid market volatility and low interest rates
  2. Resilience in the face of Covid-19 and post-crisis shocks
  3. Sale of closed life books to continue
  4. UFR to remain stable
  5. Premiums and demand are set to grow
  6. Climate change and sustainability are key topics
  7. Solvency II framework to be amended
  1. Re-risking of portfolios amid market volatility and low interest rates.

The ongoing environment of low rates has been weighing heavily on insurers’ profitability, especially life insurers, with guarantee products suffering the most. In portfolio allocation strategies, Economic and Financial Analysis 2 November 2021 Article insurance companies have to find a balance between higher returns on capital, lower solvency capital requirement (SCR) and longer duration.

In order to boost returns, insurers have been vocal about their ongoing shift towards higher risk and less liquid assets, while at the same time being conscious of the capital charges these investments attract.

The following alternative asses classes could be insurers’ top picks for the purpose of optimizing their investment portfolio :

  • Mortgages – without attracting a penalising duration factor, these limited risk investments attract relatively low capital charges, providing insurers with an opportunity to invest in an amortising asset class with a natural interest rate hedge.
  • Private placements – tailor-made products that match the exact needs of both issuer and investor are relatively low risk and can provide insurers with a perfect match for their portfolio on relatively attractive terms.
  • Infrastructure debt – an asset class that is characterised by a very long duration, the favourable SCR treatment compensates investors for the absence of a secondary market with a hefty illiquidity premium, and it can also offer something of a sustainability factor.
  1. Resilience in the face of Covid-19 and post-crisis shocks

The crisis had a minimal impact on the capitalisation of insurers, as the European Insurance and Occupational Pensions Authority (EIOPA) reported an average Solvency II ratio of 235% for the end of 2020, only seven percentage points lower than in 2019.

Going forward, with all the measures taken to combat the pandemic and ongoing vaccinations, ING expects the performance of the Life segment to improve. In Non-Life, we are going to see some catch-up over the coming months as demand will increase for non-Covid-19 related medical care which was postponed, but they believe that insurers have sufficient reserves to absorb that shock.

  1. Sale of closed life books to continue

Insurance companies are dealing with numerous market challenges (such as low interest rates, Solvency II capital charges, an ever changing regulatory framework, etc) and are seeking to create value through both new business as well as through the optimisation of already existing books. Closed books can be managed in several different ways, be it through internal optimisation within the insurer, putting it in run down internally or outsourcing some lines of business to an external company, or completely offloading balance sheet exposure. In order to release capital and shift the focus onto new business, a lot of insurance companies have been vocal about their intention to sell closed life books which pose a significant profitability challenge.

While the market for closed books in the US and the UK is booming, the activity in the EU has not yet reached the same levels. However, the number of deals in the market across Europe continues to grow, with the Dutch insurers playing an active role. In spring 2021, Allianz sold 90,000 policies to Monument Assurance Belgium NV. The latest to announce was Athora Belgium seeking to acquire closed life book of NN Insurance Belgium with €3.3bn of assets under management. The deal is expected to close in mid-2022.

  1. UFR to remain stable

Changes to the Ultimate Forward Rate continue to have an impact of insurers’ Solvency II ratio. The UFR, being higher than rates observed in the financial markets, has a positive impact on insurers’ solvency position. For 2022, the UFR was fixed at 3.45%, reflecting the expected real rate and expected inflation. Despite the slight increase in rates in 2021, no upward revision to it is expected short term. Should the trend continue over the coming years, we could see a slight increase in the rate in the coming years. The annual change in the UFR is capped at 15bp, and therefore any upward revision would be limited.

  1. Premiums and demand are set to grow

Higher claims during Covid-19 could lead to higher premiums. As such, a lot of them are planning to use built-up reserves to curb premium increases. Increased risk-awareness during the pandemic pushed demand for insurance products higher. We can expect to see growth in sales of life insurance policies, in particular. It is expected that this product will be used more widely, for instance as part of employee benefit packages.

  1. Climate change and sustainability are key topics

Climate change is at the heart of the insurance sector for many reasons, having a profound impact on both the liability and the asset side of insurers’ balance sheets. The number of natural disasters has been steadily increasing over the last decades. Climate change has exposed vulnerabilities of P&C insurers and reinsurers in the wake of rising catastrophe claims through natural disasters’ impact on businesses (business interruptions) and homes (property damage and destruction).

One of the challenges of climate change is the systemic nature of the risk.

The interconnected nature of the world means that the consequences of natural catastrophes are spreading far and wide, and multiple claims can be submitted relating to one event, so called aggregation risk.

Insurers underwriting policy is always based off past claims experience, therefore it’s important for them to proactively re-evaluate the risks to be mirrored in their premiums. It is possible that new products will have to appear to reflect the complex nature of new risks, and insurers have to remain flexible in providing new underwriting solutions to maintain coverage ability.

Insurers are also taking active climate conscious actions by offering new innovative products to their customers. Be it a discount on motor insurance of electric vehicles or providing protection on wind and solar energy, insurers are participating in actions targeted at combatting climate change. The systemic nature of climate risk makes the need for global collaboration among insurers indispensable. Insurers need to study climate risks together to better understand them and provide customers with the best solutions.

The European Commission also disclosed that a review of the Solvency II framework will comprise a new requirement for a long-term climate change analysis as well as potential changes to the standard formula catastrophe risk module.

Another way in which climate change is increasingly important for insurers is the environmental impact of their investments.

Across Europe, insurers have over €10t invested in assets, and changes in their investment behavior can have a major impact on the market. As discussed above, insurers are looking to re-risk their portfolio, which is a perfect opportunity to take environmental considerations into account.

ESG-related infrastructure debt investment would be our top pick for insurers’ growing risk appetite, offering portfolio diversification, attractive return on capital, much needed duration and, at the same time, a positive environmental impact.

  1. Solvency II framework to be amended

On 22 September 2021, the European Commission adopted a comprehensive review of Solvency II. The review is centered around two main areas. First, the revision of the Solvency II Directive (Directive 2009/138/EC) and a proposal to introduce a new Recovery and Resolution Directive, establishing proper resolution procedures. The aim of the review is to strengthen European insurers’ contributions to the financing of the recovery, with many aspects of the framework coming into focus. The Covid-19 crisis highlighted the vulnerabilities of insurers in an environment of prolonged low interest rates and also showed that there is room to further strengthen crisis management tools amid great economic and market shocks, which could potentially lead to instability in the whole financial sector. The revision is set to release as much as €90bn of funds to contribute to the post Covid-19 recovery. The Recovery and Resolution of insurers is set to be strengthened based on the experiences of the Bank Recovery and Resolution Directive (BRRD) and regulation for the recovery and resolution of central counterparties (CCPRRR) but will take into account the specific nature of risks in the insurance sector and the primary need to protect policyholders.

Source : Publication by Marina Le Blanc, Sector Strategist, Financials at ING.

 

Career advice for recent graduates in actuarial science

As the actuarial profession is very much in demand on the market, you may forget to be proactive and let yourself be driven by opportunities that have come your way. It’s a natural behaviour, as it is only with time and experience that you will really figure out your work preferences. Being open minded and shaping your own opinion about the job market is important, but it should not stop you from being aware of what you are getting into.

Here are a few tips that we advise you to keep in mind and that will help you make the right choices regarding your professional career in the actuarial field.

1. Ask yourself the right questions

As a junior actuary, it is difficult to know what roles and work environments suit you best when you have a limited knowledge of the professional possibilities in the actuarial sector. Here are some criteria to consider when entering the job market as an actuary :

💬 Do you prefer working on a variety of assignments or do you wish to specialise in a particular actuarial field?

💬 Are you more oriented towards Health, Life or Non-Life insurance?

💬 Are you more into quantitative operational tasks, or do you see yourself best in a control function, or maybe in R&D? 

💬 Are you more comfortable imagining yourself in a local or in an international company?

It’s all about asking yourself the right questions according to your priorities, personality and career aspirations.

 

2. Stay close to the market

Staying in touch with the actuarial market’s latest news will benefit you in many ways, both in the short and the long term. You can start as of now by subscribing to our monthly newsletter, where we share and analyse the latest headlines from the financial industry, with a focus on insurance companies and actuarial news. Also, do not hesitate to read about companies as it will save you from wasting your time applying to businesses that do not match your career aspirations. Each company has its own history and its own corporate culture. For instance, some companies are more or less at the forefront of innovation, some have flat management culture, other will be more hierarchical…, and so on. Trust us, when the time comes, it’s good to know! It will also enable you to build, as you go along, a 360° vision of the market and if you do not seize the added value that it is in your day to day as an actuary, take it as an exercise that will help you strengthen some of your soft skills such as intellectual curiosity, the ability to step back and analyse a situation as a whole. You will see that it is very appreciated in the business.

 

3. Stand out

There are several ways to stand out as a recently graduated actuary: through your resume, through some of your specific skills, through networking, and so on. However, to stand out you must be able to look at your (professional) environment and at yourself with a critical eye. If you have followed the previous recommendations, you may already have a good picture of the skills you could use to stand out on the market or of what you might do to acquire those skills.  To date, our experience enabled us to identify 3 key competencies that give employers a hard time when they are looking for a candidate and that will with no doubt make you stand out as an actuary.

 

4. Keep in mind that there will be a next step

The excitement of starting your professional career could overshadow your long-term goals. However, it’s important to keep them in mind, especially when making career decisions. What you do today will affect what you will do tomorrow, and there is no need to make things harder than they already are. For instance, if you’re graduating and you didn’t figure out what your work preferences are, and you’d like to keep the doors open for the future, then we would advise you to start your professional career in consultancy. If you’re not comfortable with that, we would advise to go along a career path that you planned, as it may be more difficult to switch for one field to another than the other way around.

 

Asquare Partners for candidates: what are the benefits?

Searching for a job through a recruitment agency in actuarial science means letting yourself benefit from its experience and expertise. It’s been more than 6 years now that we have been recruiting talents for the financial industry, with a particular focus on actuarial science, risk management and data science.

As a recruitment agency, our goal is to help you find a job that suits you and give you the best odds possible by:

  • Giving you relevant insights on the insurance market, locally or internationally
  • Presenting your profile in the best light for interesting opportunities
  • Accompanying and advising you along the recruitment process·es
  • Giving you valuable feedback

 

How does it work ?

You can create your account in our candidate portal or directly send your CV to one of our consultants. This will allow us to contact you to introduce ourselves, get to know you and see if we already have an interesting opportunity for you in our pipe! You can also keep up to date with the market latest news and the latest job opportunities by subscribing to our monthly newsletter, following our LinkedIn page and taking a regular look on the Careers section of our website. We are looking forward to hearing from you!

Interview: Mathieu Lambert | Deloitte Consulting

It took only a few years for Mathieu Lambert to forge a name for himself in the insurance industry at the international level. After 10 years working at AXA, mainly in Belgium, Mathieu just gave a new impetus to his career by joining Deloitte Consulting as  Director. Read below the interview with an IT engineer and former gamer “Counter Strike” enthusiast, with an outstanding journey as an actuary.

Mathieu Lambert

Mathieu Lambert

Hello Mathieu, would you tell us more about your first experience in the actuarial sector?

My journey is quite atypical. I started with a bachelor’s degree in Computer Science and then moved on to Actuarial science. Once I graduated, I joined Reacfin, a Belgian actuarial consulting firm. I was able to start my career as a Consultant in charge of very practical missions such as model development and reporting. This type of mission allows you to acquire the right reflexes, especially when you  just graduated from university without any professional experience. After 3 years in consulting, AXA quickly offered me to take the lead of the  non-life risk management team. At this young age, I couldn’t refuse such an opportunity. We were in the middle of the “golden age of risk management”, a period marked by the implementation of the Solvency II regulation.

Throughout my career, I always wanted to get additional field experience that would allow me to better understand how an actuary could have a positive impact regarding insurance brokers and clients. Thus, AXA Group proposed me to go on a mission abroad. I started working at AXA Direct UK in London where I participated in the development of their dynamic pricing project. The UK market is very aggressive and price sensitive. The British people buy their insurance contract just as they buy their plane ticket, on specialized platforms called “aggregator”. Then, I headed to Turkey where I had to set up a non-existent pricing team and support the reserving teams.

In 2016, I returned to Belgium and started leading the pricing teams at AXA Belgium for P&C Retail activities. Rapidly, I also had to manage the Data Scientists department which was quite decentralized. Still with the willpower to better understand how the industry works and the reality of the teams , in addition to all my responsibilities, I accepted to take the responsibility for  all the legal protection part in order to collaborate with the operational, claims, product and innovation teams.

 

Compared to the classic career path of an actuary, you have evolved very quickly and became a manager at a very young age (30). What is the secret of your success? 

You are the master of your own career and you reap the rewards of what you sow. So for me it’s a question of investment. If you invest in a company with the objective of growing, you generally manage to evolve in a positive way. I would advise you not to hesitate to reinvent yourself, to question yourself, to embrace failure in order to bounce back better and to stay hungry for learning.. Moreover, it is important to see your evolution in a collective way. We never grow alone but with the help of our team. Mutual respect is therefore essential.

 

Have you faced particular challenges moving on quickly to management functions?

Throughout my career, I have always had to manage people older than me. It is important to gain their trust through credibility. I think I have achieved this by directly identifying the missions where the teams needed help in order to support them by being available. Indeed, I do not hesitate to take on a task myself when the team is overwhelmed. I have always favored this team spirit with my collaborators by acting as a coach and not as a leader. Victories are then shared together and not individually.

 

Would you advise actuaries to specialize themselves on a specific expertise or to broaden their skillset to develop their career?

Both have tremendous value for a company. It all depends on their professional perspectives. If you have a career as a specialist, I would advise you to hyper-specialize in order to be recognized as a specialist in your field and among your peers. If, on the other hand, you are a generalist like me, then you have to make sure you understand the multiple facets of an insurance company to be able to bring maximum value in the strategic choices.

 

AXA Group is a company that has invested heavily in data these past few years, what have you learned from your position as Chief Data Analytics? 

Today, an insurance company can no longer exist without data. This will be even more true in the future. Investments in data are becoming increasingly massive. For me, it is critical and central for the strategy of an insurance company to get to know its customers very well and its market by collecting data. One of the challenges will be to manage, use and above all exploit its data in order to stand out from its competitors.

 

Is there an experience that has marked you the most during your career?

My experiences at the international level have been the most memorable. You learn from other cultures by discovering other market contexts. Colleagues don’t adapt to you. You are the one who must adapt very quickly to respond conscientiously and coherently to the problems within the teams while respecting the local values and culture.

 

Any anecdote to share with us?

Despite the fact that I’m a computer scientist, actuary and a bit of a geek on the side, I’ve always been passionate about everything related to cultural transformation programs. A few years ago, when AXA launched this program, I was invited to be a coach. This experience marked the first step of my interest in leadership. Yesterday, we were able to work in a hierarchical way. Today, it is no longer the case. The way to motivate employees varies completely across generations.

 

Which lesson have you learned during your career?

Knowing how to benefit from one’s experiences, whether positive or negative, in order to keep on growing.

 

If you could change one thing in your job, what would it be?

I would say the international dimension. I really do miss travelling.

 

Any idea of what the future holds for actuaries?

The recent European flooding episode sets the tone perfectly. For me, an actuary is essential to the business of an insurance company on several levels. Being able to evaluate risks is an increasingly critical challenge that faces rapidly changing risks with random frequencies. The actuaries of tomorrow will also have to master all the data at their disposal to reveal the realities of the market.

 

Any future projects?

I recently decided to move one step further in my career by leaving AXA to go back to the consulting world with Deloitte, with the objective to focusing on major transformation projects. My ambition is to have an impact on the whole value chain of the insurance industry.

 

Congratulations on this new challenge! I suggest to end this interview with our traditional question, the one we always ask. Whether on a personal or professional level: What would you like daring to do that you haven’t done yet?

Travelling for 2months with my wife and my kids around the world. (smile)

 

Interview by Adrien Binon, December 2021.