800,000 Claims and 250 Million Life Years From the German Market – A Life actuary’s dream
Understanding past morbidity experience and making appropriate assumptions for the future are traditional functions of many life insurance actuaries. With falling interest rates and the growing availability of data, the importance of data analyses comes back into the focus of risk management.
Gen Re maintains three data pools covering disability income, life insurance and annuity products. Data has been provided by German life insurers for the past 17 years. Along with benchmarking analyses delivered to the participants in tailor-made reports for their own portfolio experience, the overall results were presented in an event in Cologne on November 8, 2012.
One main aspect of our investigations in each of the pools is the comparison of actual claims experience versus reserving tables published by the German Actuarial Society (DAV).
For disability income insurance, our results show noteworthy deviations between the industry tables and actual experience. Furthermore, our substantial data pool enables us to conduct detailed analyses by occupational class and for selected occupations.
The annuity business shows strong mortality improvements, in particular, during the savings period, i.e., before the annuity benefit is paid out. For all ages the overall level of mortality is below that of the population. At the end of the savings period most annuity products sold in Germany have an option for a capital payment (instead of an annuity benefit). This results in a further marked selection effect.
In the mortality pool, we observe mortality improvements varying by age, gender and product. We conduct analyses that,confirmed the expected order of mortality levels by occupational class. The results enable us to support product development initiatives that make use of occupation as an additional differentiating factor in pricing.
With a view to the introduction of unisex insurance in the European Union as of December 21, 2012, we updated and enhanced our analysis of the observed gender mix in the different portfolios and different levels of mortality or morbidity for males versus females in combination with other parameters.
Encouraged by the positive feedback of the participants in our data pools, we will continue and advance our biometric analyses in order to further identify correlations and future trends relevant to life insurers.