The IFoA Review Team has published its fifth report Equity release: actuaries working in propositions and pricing in December 2022.
The focus of this review was the involvement of actuaries in proposition and pricing activity for equity-release loans. We invited a range of organisations involved in the equity-release market, and which employ actuaries, to take part in our review. A review questionnaire comprised the main element of the review, along with follow-up interviews with participants.
The review found that organisations and actuaries view much of equity-release pricing and proposition work as (technical) actuarial work, in common with valuation and capital activity. A consideration alongside this is the balance of customer and commercial outcomes, ensuring that propositions are both fair and well understood. This is likely to involve continued interaction with other experts involved in equity-release activity in organisations.
A webinar focussing on the report took place at 08:30 on Thursday 19 January 2023.
Alan Marshall, IFoA Review Actuary, said:
“Property wealth is a significant asset for many people and, as part of a wider financial services offering, it is right that relevant products exist as an option. It is important that equity-release products are designed, priced and sold in a way that inspires confidence in this market. Actuaries can employ their skills and judgement to play a key part, balancing the requirements of consumers and firms, and assessing the complex risks of this product.
“We would like to thank all actuaries and organisations that took part in our review and hope that the findings are useful to a range of stakeholders.”
