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Leaman - What’s next? Bulk annuity insurers

The Bulk Purchase Annuities (BPA) sector is continuing its rapid growth and is poised to benefit from substantial regulatory reforms following the Government’s review of Solvency II. Lisa Leaman outlines how the new Solvency UK insurance regulatory regime – in particular the reforms to the matching adjustment - will support insurers to meet the commitment they have made to further invest in assets that benefit the UK economy. There are new opportunities and challenges ahead, and Lisa explains how the PRA, working with industry, aims to respond to these.

The speech by Lisa Leaman at the Bulk Purchase Annuities Conference discusses the changes and developments in the bulk purchase annuities (BPA) sector. The sector has experienced rapid growth in demand, fueled by improved scheme funding levels and higher interest rates. The structure of transactions has also evolved to meet demand, with increasing complexity and features such as long price locks and deferred premiums. The Solvency UK reform package aims to support the industry in investing more in the UK economy and enhance transparency in the sector. The proposed reforms include greater investment flexibility within the MA portfolio, removing the cap on MA benefit for sub-investment grade assets, and simplifying the regulatory process. The speech emphasizes the importance of adapting the MA rules to enable the life insurance sector to play a bigger role in productive investment. The focus on accountability, resilience, and transparency is highlighted, with proposed changes in attestations and enhanced disclosures to ensure the prudence and financial strength of the industry. The speech concludes with optimism for the future of the BPA sector, anticipating positive developments including sound management of defined benefit liabilities, increased transparency, and productive investment in the UK economy.


Positivity Score: 85
Uncertainty Score: 30

state contingency of monetary policy transmission - nan

Slides presented by Isabel Schnabel, Member of the Executive Board of the ECB, at the Inaugural conference of the ChaMP Research Network “Challenges for Monetary Policy Transmission in a Changing World (“ChaMP”)”


The speech highlights the significance of considering the state contingency of monetary policy transmission when formulating policies. It emphasizes that the effectiveness of monetary policy depends on the state of the economy and the specific shocks it faces. In periods of economic uncertainty, the transmission of monetary policy may be less effective as caution increases in spending and investment decisions. Additionally, the impact of monetary policy transmission can vary across different sectors of the economy, including the financial sector, housing market, and credit availability. Policymakers need to understand these dynamics to make appropriate responses to changes in the economic landscape.



Positivity: 80
Uncertainty: 65

Oil: When The Facts Change…

• Changing ‘facts’ in the Middle East and more widely are making prospects for the price of oil even more murky, as is underlined by the wide range of forecasts among market analysts. What is clear, however, is that the escalation in Iran/Israel tensions has skewed risks firmly to the upside.

By Alastair Newton

Indonesia Policy Rate 6.25% (consensus 6.0%) in Apr-24

• Bank Indonesia unexpectedly raised the BI-Rate by 25bps to 6.25%, defying the consensus forecast as it aims to stabilize the Rupiah and curb inflation amid global financial uncertainties.
• The rate hike is a strategic response to external pressures and inflation risks, ensuring that inflation remains within the 2.5 ± 1% target range through preemptive monetary tightening.
• Despite the rate increase, Bank Indonesia maintains a pro-growth approach through supportive macroprudential policies and enhancements to the payment system, promoting economic expansion and financial system stability.