- Background
During the 20th century and continuing into current times, general population mortality has improved significantly due to medical advancement, improved work conditions, public health initiatives, individual lifestyle changes, and other reasons. In addition to these causes, life insurers and annuity writers may have also seen mortality improvements in their insured populations from business initiatives such as implementing more refined mortality risk assessment and segmentation procedures and practices (e.g. introduction of preferred risk classes or collecting attending physician statements through the underwriting process).
With almost daily reports of scientific discoveries that may extend human life, the outlook for future mortality improvement remains possible. In order to manage longevity risk and to estimate future rates of insured and annuitant mortality improvement, a good understanding of historical mortality rates of improvement from both an insured and a general population perspective is needed.
- Purpose
The purpose of this project is to educate actuaries and other interested parties on the historical mortality rates of improvement, mortality improvement trends experienced within the US and globally and considerations for future mortality improvement levels.
- Research Objective
The overall objective for this project is to perform analysis relating to US historical life insurance and annuity policyholder mortality improvement trends and/or mortality improvement rates and how they compare to that of the general US and international populations. In addition, practices, methodologies, techniques for modeling future mortality improvement are to be examined. This is to be accomplished by identifying, reviewing, compiling and analyzing data and findings from existing literature/studies. The researcher(s) will summarize findings in a report that addresses at a minimum the following items:
- What data sources are available for analyzing both Individual US life insured as well as Individual and Group annuity policyholder mortality improvement. How do these sources compare to the insured data sources found in other countries such as Canada, UK, Ireland, Continental Europe, Asia and Australia? In discussing the data sources, please indicate if the information is available by product, gender, age, smoking status, birth cohort or other demographic/risk class. Also provide some information regarding the amount of data (including its credibility and accuracy) available by risk factor.
- What data sources are available for analyzing US general population mortality and how do they compare to the general population mortality data sources found in other countries such as Canada, UK, Ireland, Continental Europe, Asia and Australia? In discussing the data sources, please indicate if the information is available by product, gender, age, smoking status, birth cohort or other demographic/risk factor. Also provide some information regarding the amount of data available by risk factor.
- What are the historical life insured and annuity policyholder mortality rates of improvement experienced in the US and internationally? If at all possible, examine by risk /demographic factor such as gender, age, smoking status, birth cohort, etc.? How are underwriting and smoking status controlled in the experience study?
- If at all possible, how much of the US insured population mortality improvement rates are a result of changes in industry practices (e.g. underwriting, smoker definition and marketing) versus other factors.
- Within the last 50yrs, what are the historical general population mortality rates of improvement experienced in the US? If at all possible, examine by risk /demographic factor such as gender, age, smoking status, birth cohort, etc.
- How do these population mortality rates trend compare to that of other countries such as Canada, UK, Ireland, Continental Europe, Asia and Australia.
- How do the historical US life insured and annuity policyholder mortality rates of improvement compare to the US general population mortality improvement rates?
- What techniques, methods, and resources are available for modeling future mortality improvement?
- What biometric or actuarial theories exist around the possibility of further mortality improvements?
- Based on the findings, identify areas where further research is needed.
It is expected that the researcher(s) will work closely with a Project Oversight Group (POG) in finalizing the list of issues the research will address. The researcher(s) will also provide the POG with periodic progress reports. Members of this group will be available to provide feedback and guidance to the researcher(s) as needed.
A relatively short-term project is envisioned with results within 6 months from the starting date.
- Proposal
To facilitate the evaluation of proposals, the following information should be submitted:
- Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
- An outline of the approach to be used, emphasizing issues that require special consideration. Details should be given regarding the manner in which appropriate published material will be identified, search techniques to be used, collateral material to be consulted, and possible limitations of the review and analysis. Time periods proposed to be examined should be noted in this outline.
- Cost estimates for the research, including computer time, salaries, report preparation, research costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included.
Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
- A schedule for completion of the research, identifying key dates or time frames for research completion and report submission. The research should be completed in a time frame covering no longer than six months.
- Ideas regarding the form and distribution of the final report, both for immediate release and for permanent reference (e.g., submission to North American Actuarial Journal or other refereed publication, SOA Monograph Series, CD ROM).
- Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
- Selection Process
The SOA's Reinsurance Section Council (RSC) is responsible for the selection of the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the RSC will make the final decision. The SOA's Research Actuary will provide staff actuarial support. A Project Oversight Group (POG) will be appointed by the RSC to oversee the project upon selection of the proposal.
- Questions
Any questions regarding this RFP should be directed by fax or e–mail to: Ronora Stryker, SOA Research Actuary, fax: 847.273.8514; e–mail: rstryker@soa.org.
- Notification of Intention to Submit Proposal
If you intend to submit a proposal, please send written notification by October 9, 2009 to Jan Schuh, SOA Research Administrator, by e–mail (jschuh@soa.org), fax (847.273.8556).
- Submission of Proposal
Please e–mail a copy of the proposal to: Jan Schuh at jschuh@soa.org.
Proposals must be received no later than October 16th, 2009. It is anticipated that all researchers who have submitted proposals will be informed of the status of their proposal no later than November 20th, 2009.
Note: Proposals are considered confidential and proprietary.
- Conditions
The Society of Actuaries reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available to proceed. The Society of Actuaries also reserves the right to redirect the project as is deemed advisable.
The Society of Actuaries intends to copyright and publish the results of this research. The research will be considered work-for-hire and all rights thereto belong to the Society of Actuaries. However, appropriate credit will be given to the researcher(s).