Yes, my role is sometimes to remind you of your 5-a-day  Page 9  commitments, to maintain a healthy and balanced diet, even when everyone else is promising you ice-cream. So let me circle back to the core of my remarks today: the BPA market is in a period of accelerated growth and yes, while we are pleased with the opportunities this brings, insurers should approach this with moderation. Our existing principles, including senior management responsibility and the Prudent Person Principle – play into all the areas. These are importantly strengthened and supplemented by the additional supervisory measures announced in the Solvency UK package. The combination of existing and new tools will bolster the role of Boards and firms’ senior managers owning their decisions. And, through improved disclosure, we will support market discipline to empower broader stakeholders. Should those prove insufficient, we will not shy away from highlighting areas of market-wide concern or taking the necessary supervisory actions. My resolve is strong: A healthy and sustainable life insurance market is a long-term value creator for the whole economy. It is in everybody’s interests to work together to ensure a dynamic vibrant industry for years to come. One that serves the needs of, and provides protection for, customers, and makes the strongest contribution it possibly can to investment in the wider UK economy. I would like to thank Alwin Luchmaya, Sejal Haria, Alan Sheppard, Stephen Walton, Igor Brkic, Jemima Ayton and Tapasya Bhandari, for their assistance in preparing these remarks. Thank you. 1.
And a lot is happening in the Bulk Purchase Annuities (BPA) market: pension scheme funding levels have greatly benefited from the rise in interest rates[2], and the UK insurance industry is preparing itself for record levels of bulk purchase annuity transfers[3]. De-risking corporates of their legacy defined benefit schemes brings substantial benefits to UK plc, and the additional capital insurers inject contributes to the security of pension scheme members. This structural shift in the provision of retirement income also gives insurers an increasingly important role as long term investors in the UK real economy. Insurers therefore need to balance the short term financial and reputational incentives to grow rapidly, with long term and enduring financial strength, to meet the long term needs of policyholders and the economy. I spoke to you last year about the conditions for long-term sustainable growth in the annuity sector. This year, in the face of considerable temptation to capture business opportunities, I will argue that  Page 3  BPA writers need to exercise moderation. In that vein, let me invite you to a not quite Epicurean three course feast. By way of starter, I will first reflect on recent BPA market developments and then move to our main course, which focuses on three areas: an expansion of risk appetites; a reliance on third party capacity; and greater interconnectivity with the wider financial system. These clearly call for effective governance, business and risk management.