Milliman carried out a survey of senior life insurance executives to gauge the current views on a number of issues relating to participating business across Asia. Some of the main survey findings were:
- The overall importance of par business will remain high.
- There is a wide variety of product propositions in many territories, ranging from “risk-free plus” (either deposit rates or sovereign bond yields) up to a smoothed return benefiting from guarantees.
- Respondents believe par business offers reasonable (affordable) levels of guarantees and reasonable levels of profitability to insurance companies.
- Governance varies widely.
- Key risks to continued success are low interest rates and product illustrations.
- The interpretation of policyholders’ reasonable expectations (PRE) is poorly understood by policyholders.
- The overall prognosis for participating business is positive.