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There is a dearth of organized and reliable data on closed blocks when it comes to value and capital, product types and complexities, technology and operational challenges. The EY US Life & Annuities Insurance Survey invited a group of select mid- and large-sized insurers and reinsurers to better understand the closed block landscape across seven key dimensions: strategic intent, products, capital, expense, technology, operations and experience.
Our study reveals a set of key challenges for insurers that need to be overcome, provides a snapshot of where the industry stands today on closed blocks, and captures the points of view and perceptions on the topic across multiple leadership and functional positions. Our research findings will help insurance companies, annuity providers, reinsurers and aggregators to better understand where they are vis-à-vis the industry and help them begin to rethink their approach. The cost of doing nothing, as the survey clearly showed, can be rather high.
Key findings
- Significant locked-in capital with subpar returns coupled with siloed operations and bloated operating costs indicate the need for greater efficiency.
- The complex technology landscape highlights the need to mitigate legacy risks and drive consistent customer experience.
- The L&A insurance industry needs to approach closed blocks from a holistic point of view, carefully considering the various nuances straddling across capital, product complexity, operating models and technology risk.