Longevity modelling must evolve

Current approaches to modelling longevity are undervaluing pension liabilities. Stochastic models should be used if the risk is to be properly accounted for and managed, argue Chris Madsen and Martijn Tans

technical blocks

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For at least the past century-and-a-half, life expectancy has been rising consistently. However, it is only recently that its measurement and modelling has gained significant attention. This is primarily the result of the profound impact on pension and social security systems of three elements: increasing longevity; volatile and poorly performing financial markets; and decreasing fertility rates.

The continuous increase in available computing

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The future of life insurance

As the world constantly evolves and changes, so too does the life insurance industry, which is preparing for a multitude of challenges, particularly in three areas: interest rates, regulatory mandates and technology (software, underwriting tools and…

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