Author: Aaron Woolner
The UK’s Institute and Faculty of Actuaries includes data from as far back as 1825 when calculating its life expectancy tables. Fundamental to those estimations is the importance of the correlation between income and life expectancy. The effects of this relationship are still apparent today. Research by the McKinsey Global Institute shows that the GDP per capita in the Polish IT hub Wroclaw increased from $23,000 in 2000 to $55,000 two decades later. Wroclaw’s citizens saw their average life expectancy increase by 4.9 years in tandem with the influx of high paying jobs from tech giants such as Alphabet and…
UK Regulators analyse Funded Reinsurance risks in Pension Risk Transfers; PRA raises portfolio recapture concerns.
Obesity is a killer, but nobody dies directly from being overweight. Instead, excess pounds are linked to a higher risk of getting type II diabetes, developing fatty liver, and having a stroke, while research links obesity to up to 8% of all cancer cases. Obesity is a factor in all of the four main non-Covid causes of deaths in the UK in 2022, while diabetes itself is a risk factor for heart disease, the leading cause of mortality worldwide. The number of overweight people is so high globally that the World Health Organisation has dubbed it an, ‘obesity epidemic’. “There’s…
Nearly seven million Americans over 65 had Alzheimer’s dementia in 2023, according to figures from the US Alzheimer’s Association (USAZ). USAZ estimates this accounts for one in nine of the total population in this age group, a figure that rises sharply as people get older with one third of those over the age of 85 having some form of the disease. According to Swiss Re’s 2023, ‘Future of life expectancy’ report, Alzheimer’s accounts for up to 80% of the total number of dementia sufferers, a group that the firm predicts will expand in size as societies age. Despite over $40bn…
In May last year The Netherlands Future of Pensions Act was approved by lawmakers and came into force on 1st July 2023. The new law heralds a step-change in the Dutch pension industry and a wholesale switch away from a defined benefit-based system. Subject to a four-year transition period, all pension providers in the Netherlands need to switch from defined benefit (DB) model to a defined contribution (DC) one by 1st January 2027. But November elections in the country brought in a new coalition government made-up of four parties, three of which campaigned on manifestos containing pledges to make major…
The US pension risk transfer (PRT) market saw a record-breaking first half of 2023 with deals worth $22.5bn recorded, according to data from Legal & General Retirement America (LGRA), but full year numbers are likely to be lower than the all-time high recorded in 2022. Despite a number of deals taking place in the third quarter, including a plan termination by aerospace firm AAR Corp, and partial buy-outs by Owens Corning and ATI Inc, there were none on the scale of the record breaking $16bn PRT conducted by IBM during the same period 12 months earlier. LGRA’s November PRT Monitor…
A report published by Legal & General at the end of the first half of 2023 predicted the UK’s pension risk transfer (PRT) market was on course for one of its busiest years on record and activity has continued at a hectic pace since. On one day in November two transactions worth a combined $11bn were announced: a $6bn transfer from pharmacy chain Boots’ pension fund to Legal & General, and a $5bn bulk annuity deal between retailer Co-op and Rothesay Life. The background to the high level of activity in the UK’s PRT market is the series of 14…
According to the World Health Organisation, there are approximately 1.3 billion global users of tobacco. Each year, eight million die – a number which includes more than one million passive smokers. Governments globally are trying to reduce the number of people smoking but they are dealing with the issue in different ways. The UK introduced a ‘swap to stop’ scheme in April that allows smokers to exchange their cigarettes for an electronic substitute. Health Minister Neil O’Brien heralded the initiative as a global first in a speech announcing its introduction as the UK looks to cut cigarette use to less…
A number of factors determine an individual’s likely life expectancy: Past medical history, smoking, gender, age, and most importantly, socio-economic status. The link between the latter and life expectancy is well documented with a broad range of data to support it. A 2019 study by Drexel University, for example, found the average life expectancy for the lowest socio-economic groups in the US to be nine to 12 years below that of people the same age in the highest socio-economic cohort. But according to Sacha Dhamani, chair of the Mortality and Morbidity Research Steering Committee at the UK’s Institute and Faculty…
The US pension risk transfer (PRT) market saw a record volume and number of deals take place in 2022. This year is set to break more records as the rapid rise in interest rates makes offloading schemes more affordable and new players entering the market has increased competitiveness. Last year, the US recorded over $50bn worth of PRT deals, a big jump on the $38.1bn that actuarial consultants Milliman recorded for the market in 2021. The same trend is being seen in other countries, with Canada and the UK seeing an upshot in the amount of deals being struck as…