Make sure you capture the data dividend @ClubVita #datadividend - - PowerPoint PPT Presentation
Thank you for joining us the webinar will start shortly Thinking about a buy out in 2020? Make sure you capture the data dividend @ClubVita #datadividend January 30 th , 2020 linkedin.com/company/club-vita 12 noon ET Club Vita LLP is an
Club Vita LLP is an appointed representative of Hymans Robertson LLP, which is authorised and regulated by the Financial Conduct Authority and Licensed by the Institute and Faculty of Actuaries for a range of investment business activities.
January 30th, 2020 12 noon ET
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Premium relative to “market” liability*
Two thirds
between 98% and 103%
*Source; Mercer, US: Data based on 64 US retiree-only deals from May 2016 to October 2019. Market liability defined using Mercer Yield Curve and most recent SOA mortality tables with collar adjustment.
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Society of Actuaries tables
Club Vita 5-digit ZIP code model Club Vita 9-digit ZIP code model
amount
One Rating factors Factors used at one time
All
All Range of healthy male life expectancy at age 65 2.7 years
Club Vita 2020+ model
amount as affluence measure All
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Impact of moving from RP06 to 9 digit ZIP US VitaCurves (both MP18 improvements)
Increasing plan size (benefits in payment)
Source: Club Vita, Zooming in on ZIP codes
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* Small benefit retirement annuity purchase Source: Club Vita; for a sample large US plan, the effect on deciles of liabilities of moving from plan’s assumed accounting assumption to individual VitaCurves for baseline longevity
Split of liability by pension amount Largest pensions Smallest pensions
0% 2% 4% 6% 8%
Individual assumptions vs 'average' assumptions
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0% 1% 2% 3%
Overpriced Underpriced
Changes in pricing or reserves from adding salary as a rating factor
(Based on 115 different pension scheme portfolios of pensioners and dependants)
Increasing portfolio size Loss of 1/3 of profits? £63m loss (0.6%) in £11bn business written £67bn missed business? Portfolios which could be written at average reduced premium of 1.4% <£200m Increasing portfolio size Loss of 1/3 of profits? £63m loss (0.6%) in £11bn business written £67bn missed business? Portfolios which could be written at average reduced premium of 1.4%
No impact
Introducing final salaries changed portfolio valuation by +/-2%. We now get salaries in 70% of UK records.
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Male Pensioners
Joint life Single life
Plan A Plan B Plan C
. . . . .
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Female Pensioners
Joint life Single life
Plan 1 Plan 2 Plan 3
. . . . .
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12 13 14 15 16 17 18 19 20 21 22 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Life Expectancy at age 65 (men)
Comfortable Making-Do Hard-Pressed
Narrowing of socio- economic gap Strong, stable improvements for all Resilience of higher socio-economics
~ higher incomes ~ live in most deprived areas ~ everyone else
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