2007 annual meeting assembl e annuelle 2007 vancouver
Download
Skip this Video
Download Presentation
2007 Annual Meeting ● Assemblée annuelle 2007 Vancouver

Loading in 2 Seconds...

play fullscreen
1 / 17

2007 Annual Meeting ● Assemblée annuelle 2007 Vancouver - PowerPoint PPT Presentation


  • 106 Views
  • Uploaded on

Canadian Institute of Actuaries. L’Institut canadien des actuaires. 2007 Annual Meeting ● Assemblée annuelle 2007 Vancouver. Goal: Propose mortality improvement basis for annuity and life insurance valuation Sub-Committee Members:

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' 2007 Annual Meeting ● Assemblée annuelle 2007 Vancouver' - calvin-holcomb


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
2007 annual meeting assembl e annuelle 2007 vancouver

Canadian

Institute

of

Actuaries

L’Institut canadien

des

actuaires

2007 Annual Meeting ●Assemblée annuelle 2007

Vancouver

update on mortality improvement sub committee
Goal: Propose mortality improvement basis for annuity and life insurance valuation

Sub-Committee Members:

Marc-Andre Belzil, Jacques Boudreau, Edward Gibson, Claude Normand, Helene Pouliot, Les Rehbeli, Mario Robitaille

2007 Annual Meeting

Assemblée annuelle 2007

Update on Mortality Improvement Sub-committee
update on mortality improvement sub committee1
Current draft of proposal:

Best estimate improvement scales would be the same for life insurance and for annuity business

Mortality Improvement assumption would have its own MfAD (insurance and annuity MfADs would be in opposite directions, special consideration for death supported insurance policies)

Mortality improvement rates based on Hardy’s paper (Data from 1921 to 2002)

2007 Annual Meeting

Assemblée annuelle 2007

Update on Mortality Improvement Sub-committee
slide4

2007 Annual Meeting

Assemblée annuelle 2007

Historical Mortality Improvement Rates: Hardy Study Population Data (1921-2002)

draft proposal for mortality improvement
Population data over maximum duration better source than insurance or annuity study data (which are less reliable and have more influences, such as underwriting improvements over time)

Rates will be the same for males and females (more on this shortly)

Improvement rates for first 25 years only, then set to 0%

Introduce concept of “hedge” credit for companies with blends of insurance and annuity business

2007 Annual Meeting

Assemblée annuelle 2007

Draft Proposal for Mortality Improvement
draft proposal for mortality improvement1
Why unisex rates?

Menard/Wade Report released in May 2007

Uses population data

Shows mortality improvement rates over various time periods

For longer durations (e.g. 70 years) female rates higher than male rates; for shorter durations (e.g. 10 years) the converse is true

2007 Annual Meeting

Assemblée annuelle 2007

Draft Proposal for Mortality Improvement
slide7

2007 Annual Meeting

Assemblée annuelle 2007

Historical Mortality Improvement- Males*

* Source: Menard/Wade Report

slide8

2007 Annual Meeting

Assemblée annuelle 2007

Historical Mortality Improvement- Females*

* Source: Menard/Wade Report

slide9

2007 Annual Meeting

Assemblée annuelle 2007

Historical Mortality Improvement Rates: Hardy Study (1921-2002) vs Proposed Best Estimate

slide10

2007 Annual Meeting

Assemblée annuelle 2007

Mortality Improvement, Menard/Wade 1931-2001 vs Proposed Best Estimate

slide11

2007 Annual Meeting

Assemblée annuelle 2007

Mortality Improvement, Menard/Wade 1966-2001 vs Proposed Best Estimate

slide12

2007 Annual Meeting

Assemblée annuelle 2007

Mortality Improvement, Menard/Wade 1991-2001 vs Proposed Best Estimate

draft proposal for valuation
Life Insurance mortality improvement:

Maximum improvement rates are equal to 50% of best estimate rates (effectively a 50% MfAD on the improvement rate)

Maximum duration of improvements is 25 years

Special consideration for death supported policies

Annuities mortality improvement

Minimum improvement rates are 150% of best estimate rates

Minimum duration is 25 years

2007 Annual Meeting

Assemblée annuelle 2007

Draft Proposal for Valuation
slide14

2007 Annual Meeting

Assemblée annuelle 2007

Mortality Improvement Rates

slide15

2007 Annual Meeting

Assemblée annuelle 2007

Annuity Valuation Mortality Improvement Rates

final comments
Proposed change for life insurance business would require a change in the Standards of Practice

currently 100% of mortality improvement must be in MfADs

Proposed change for annuities would be simpler but sub-committee feels it is better to implement both at the same time, as they are inter-related

therefore unlikely to have any changes for 2007 valuation

2007 Annual Meeting

Assemblée annuelle 2007

Final Comments
final comments1
Proposed change has had limited review from CLIFR, but has not yet been endorsed and is still in early draft stage

Comments from the industry are very welcome

Limited testing (2 to 3 companies) indicates material increases to annuity reserves (3% to 5%) and material decreases to life insurance reserves (1% to 2%, but highly dependent on business mix)

We invite CIA members to conduct further testing and to send us your results

2007 Annual Meeting

Assemblée annuelle 2007

Final Comments
ad