The Society of Actuaries in Ireland (SAI) provides regulations and guidelines to all Irish insurers specifying the fund growth rates to be used in customer projections. These rates were reviewed by the SAI this year and have changed with effect from 1st March 2021.
The changes being implemented affect the growth rates which are used in projections and will see a reduction across all asset classes. This means that projected values used in disclosure will fall. This is an industry-wide change which all life insurance companies are required to implement by 1st March 2021.
The main changes that will affect the projected values provided to customers are summarised below:
Assumption | Current | New |
Cash (Maximum annual investment growth) | 1% | 0% |
Fixed Interest (Maximum annual investment growth) | 2.5% | 1% |
Equities (Maximum annual investment growth) | 5% | 4.5% |
Property (Maximum annual investment growth) | 5% | 4.5% |
Overall (Maximum annual investment growth) | 5% | 4.5% |
Depending on the type of fund(s) a customer is invested in, their projected growth rates will likely reduce, but may reduce by different amounts than those noted above subject to the fund’s asset mix. Multi asset funds use a weighted average of this breakdown to project future growth rates.
It is important to note that this update will not result in any changes to our products or to customers’ terms and conditions.
If you require any further information, please contact your New Ireland Account Manager.