McGing Advisory & Actuarial

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🌟Retirement income product development news 🌟 AustralianSuper and TAL Australia have just announced their latest collaboration: an innovative 'income for life' retirement option. - The new retirement option will be tailored to provide 1.4 million AustralianSuper members with greater financial choices post-retirement. - It provides a significant enhancement to TAL's long-term position in the insurance market, building on their existing work, such as providing AMP with MyNorth Lifetime Income products. - This partnership is set to raise standards for retirement planning in Australia, offering personalised, flexible solutions that cater to the diverse needs of retirees. This collaboration between AustralianSuper and TAL is more than just a partnership; it's a commitment to innovation, financial security, and the well-being of retirees across Australia. It showcases the strength of combining expertise to meet the evolving needs of the community, ensuring a brighter, more secure future for all. #AustralianSuper #TAL #Superannuation #ReimagineRetirement #InnovationInFinance

Are accounting standards crushing innovation in retirement income products? Remember when IAS 19 (AASB 119) put a chokehold on traditional longevity products - defined benefit pensions? By forcing companies to value pension liabilities using bond yields, it made defined benefit pensions look like financial kryptonite on balance sheets. The result? A mass exodus from traditional pensions all over the world, as businesses scrambled to avoid balance sheet volatility. Now, enter IFRS 17 (AASB 17). This beast of a standard might just do to life insurance what IAS 19 did to pensions. It’s designed to clean up insurance contract accounting. But here’s the kicker: it could seriously dampen innovation, especially for innovative market-linked longevity products. Why? Because IFRS 17 loves complexity. It could force insurers into a corner where they must use conservative risk-free rates to value liabilities, mirroring the IAS 19 playbook. Or if not the liabilities themselves, auditors are forcing life insurers to value any reinsurance backing the longevity risk using risk free rates. This isn’t just an accounting headache; it’s a chokehold on creativity. The fear is real that insurers might shy away from rolling out new, innovative products if their balance sheets start looking like a minefield. So, are we watching the slow death of life insurance innovation, courtesy of IFRS 17? Could this be another tale of regulation gone wild, prioritising numbers on a page over real-world impacts like choice and competition in the life insurance market right when Australia needs longevity product innovation the most? As IFRS 17 takes the stage, it’s a moment for reflection: How do we guard the future of insurance innovation against the unintended fallout of regulation? Because if history teaches us anything, it's that balance sheet beauty shouldn’t kill innovation. #AASB17 #IFRS17 #LifeInsurance #RegulationVsInnovation #Superannuation