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Real-time management information

The sooner you know about a problem, the sooner you can do something about it.  I have written before about real-time updates to mortality estimates during shocks.  However, real-time methods also have application to everyday management questions.  Consider Figure 1(a), which shows a surge in new annuities in December 2014.  The volume of new annuities written in that month was large enough to shift the average age of the in-force annuities, as shown in Fig

Written by: Stephen RichardsTags: Filter information matrix by tag: Nelson-Aalen, Filter information matrix by tag: annuities

Going negative

In the past I have occasionally written about the oddity that is a negative yield. At that time, very short-term yields on Swiss government debt were negative. Since then the negative-yield phenomenon has only spread further
Written by: Stephen RichardsTags: Filter information matrix by tag: annuities, Filter information matrix by tag: PRA

Lump sum or annuity?

People are often faced with a decision whether to live off their savings or buy an annuity.  Normally such decisions are made around the retirement ages of 60–65.  However, an interesting counter-example has just been provided by eighteen-year-old Charlie Lagarde, the winner of a lottery in Canada. 
Written by: Stephen RichardsTags: Filter information matrix by tag: annuities, Filter information matrix by tag: life expectancy

Pension freedom or trap for the unwary?

An interesting development is the pending right of annuitants to sell their future annuity payments for a cash lump sum, planned for introduction in 2017. The new option will only apply to holders of individual annuity policies with insurers, either from initial purchase of an annuity or because they are holders of individual annuities following a buy-out.
Written by: Stephen RichardsTags: Filter information matrix by tag: pension freedom, Filter information matrix by tag: annuities, Filter information matrix by tag: selection risk, Filter information matrix by tag: information asymmetry

Countdown to unisex pricing

In just over one year's time, insurers throughout the European Union will be prohibited from using a person's gender to price insurance risks.
Written by: Stephen RichardsTags: Filter information matrix by tag: gender, Filter information matrix by tag: annuities

Recurrent problem

Actuarial work involves calculating the present value of future liabilities.  In the case of pension funds and annuity portfolios, this means valuing future pension payments. This typically involves calculating a lot of annuity factors, often using spreadsheets.

Written by: Stephen RichardsTags: Filter information matrix by tag: annuities

Devil in the detail

Last week I wrote about the judgment by the European Court of Justice which bans the use of gender in insurance pricing after 2012.  An interesting aspect is the areas of insurance business which may not be affected. 
Written by: Stephen RichardsTags: Filter information matrix by tag: gender, Filter information matrix by tag: annuities

Gender and annuity pricing in the EU

In a previous post we discussed the possibility of gender being banned throughout the EU as a rating factor for insurance pricing.  This has now come to pass — on 1st March 2011 the European Court of Justice ruled that gender may not be used in insurance pricing according to European law.  So what will happen now?
Written by: Stephen RichardsTags: Filter information matrix by tag: gender, Filter information matrix by tag: annuities

Are annuities expensive enough?

The rationale of any business is to make a profit. This is usually achieved by selling things for more than they cost to make or supply.
Written by: Stephen RichardsTags: Filter information matrix by tag: annuities, Filter information matrix by tag: profit