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A valentine for actuaries. You will love how the Ruark Mortality Table will help improve product pricing and the effectiveness of variable annuity hedging programs, and serve as an efficient basis for pure mortality reinsurance.
Download: Ruark Mortality Table – Feb 2012.pdf
Elizabeth Festa of National Underwriter had an article in the January 2012 edition entitled “Policyholders Getting Smarter, Leading to Charges for VA Products, Says Moody’s”. An excerpt from this article is:
In pricing and hedging the risks of their VA contracts, companies must also make assumptions about how many customers will hold on to their policies long enough to be eligible for benefit, how many of them will exercise guaranteed benefit options when they become available and how many more of them may exercise those options, the report explains.
Tim has written a white paper entitled “Modern Variable Annuity Risk Management”, which can be downloaded here. The paper describes the three key risks facing modern variable annuity companies — investment risk, insurance risk, and policyholder behavior risk — and how the Ruark Companies are uniquely positioned to help our clients develop and maintain integrated solutions to these risks. In particular, mortality in the accumulation phase and longevity in the guaranteed living benefit payout phase are large yet under-appreciated risks in the industry that prudently structured (and available!) reinsurance can mitigate. And regular installments of our industry-leading experience studies of policyholder behavior provide the profound and detailed insights that variable annuity companies need to effectively manage this risk. Please contact Tim if you would like to discuss how we can help you implement these solutions for your company.
Jack Marrion’s Index Compendium for February 2012 includes a reference to Ruark Consulting’s recently completed Fixed Indexed Annuity Surrender Study, as follows:
Index Annuity Surrenders Sharply Down
Based on data from carriers representing 80% of industry sales, a new study published by Ruark Consulting (www.ruarkonline.com) finds that surrenders of index annuity contracts declined significantly from 2006 to 2010. Ruark believes this to be due to less competitive alternatives, use of GLWB’s and greater suitability standards. The Ruark study confirms predictions made by Advantage Compendium in 2008 that annuity exchanges would decline due to annuity lifetime benefits and tightened compliance.
Maria Wood has published an article in LifeHealthPro (which I still think of as National Underwriter) entitled “Fixed Indexed Annuity Holders Keep Holding On”. It is another article based on Ruark Consulting’s Fixed Indexed Annuity Surrender Study. It can be viewed at:
Fixed Indexed Annuity Holders Keep Holding On
Linda Koco has published an article in AnnuityNews.com entitled “More Policyholders Keeping Their Indexed Annuities”. It is based on the results from Ruark Consulting’s Fixed Indexed Annuity Surrender Study. It can be viewed at:
More Policyholders Keeping Their Indexed Annuities
SIMSBURY, CT/January 5, 2012 – Ruark Consulting LLC, a Connecticut-based actuarial consulting firm, has completed its 2011 Fixed Indexed Annuity Surrender Study. This ground-breaking study includes unprecedented detail on the impact of various product features on policy persistency, which is invaluable for insurance companies to manage risk and design appropriate products.
Key findings include:
Tim Paris’ presentation at the SOA Annual Meeting on Managing Longevity and Mortality Risks is available here. Longevity risk is an under-appreciated risk in variable annuity guaranteed living benefits. Tim welcomes comments and discussion.
Tim Paris – Managing Longevity and Mortality Risks
In a previous article (When to Automate) I suggested eight considerations when one is deciding whether to automate a complicated process to improve both efficiency and accuracy. In this article I will summarize a real-life project where we used automation to achieve those goals. My hope is that you can identify processes in your own company that could similarly benefit from automation.
One of Ruark Consulting’s businesses is the administration of reinsurance treaties between insurance companies. This involves receiving very large tables of data from one company, performing extensive calculations, and creating large tables of data to be sent to the other party. The steps involved in this process are indicative of the issues to be dealt with in any automation process.
The Executive Summary of Ruark Consulting’s 2010 variable annuity experience studies is now available. Highlights are presented for the 2010 Variable Annuity Surrender Study and the 2010 Variable Annuity Benefit Utilization Study.
