1. Canadian Institute of Actuaries L’Institut canadien des actuaires
2009 Seminar for the Appointed Actuary
Colloque pour l’actuaire désigné 2009 1

2. The Actuary and Changing Times
PD -2 (Life)
The Actuary and Changing Times
John Brierley

3. RBC Life Invested Assets

4. RBC Life Liabilities

5. RBC Insurance Canadian Life Canadian Home and Auto Canadian Travel
US Life
US Travel
International Reinsurance

6. RBC
Bank
Insurance

7. Impacts Asset Defaults: Equities: Disability: None in Canadian Life
Minor elsewhere in other insurance
Equities:
Very small segregated fund portfolio
Material impact in traditional life
Disability:
Less impact than expected from an economic downturn

8. Impacts Lower interest rates Asset Extension
Provide for 50% excess credit spread
Keeping ahead of ultimate reinvestment rate reductions
Looks a lot like last year’s DCAT adverse interest rate scenario
Asset Extension
Better matching generated liability reductions in CALM

9. Impacts
Small income impact from volatility in the Initial Reinvestment Rate:
Market value change on excess HFT assets tends to offset much of the impact of IRR changes
Quarterly income volatility from equity assets held in the general account

10. Impacts Investment Restrictions: Tight money lending conditions
Asset sector limits
Limitation on commercial mortgages

11. Impacts Universal Life
Less change in policyholder behaviour than expected
Deposits still being made
No significant difference in fund transfers or partial surrenders
Policy lapses not significantly impacted

12. Summary No impact from asset default Equity market downturn noticeable
Providing for lower interest rates
Disability experience slightly adverse
Universal Life neutral
Asset extension favourable to income
Limitations in asset choices
“not really that bad a year”