Insurance and reinsurance broker JLT has announced that it will become the first actuarial consultancy to apply Club Vita’s longevity analytics capabilities to defined benefit (DB) pension plans through RiskFirst’s PFaroe modelling system.
DB clients at JLT will now be able to conveniently set best-estimate longevity assumptions and strengthen their decision-making thanks to this new integrated capability.
Club Vita pools data from over 220 UK DB pension schemes (covering 2.8 million pensioners) to design, build, and refine specialist quantitative tools that enable trustees to actively tailor their longevity risk.
JLT believes that, by tailoring mortality assumptions at an individual member level, many pension schemes could benefit from as much as a 5% improvement in funding level.
Additionally, FinTech company RiskFirst’s asset and liability risk software solution, PFaroe, currently reaches more than half of the UK DB pension market, and in total supports over 1,800 pension plans, with in excess of US $750 billion of liabilities.
Steve Robinson, MD Consulting JLT said: “We’re delighted to be able to bring the benefits of Club Vita’s longevity models to our clients automatically through our actuarial valuations, providing them with even better quality information and insight.”
Douglas Anderson, Founder of Club Vita, also commented: “It’s now well established that the UK’s diverse population has a wide range of different longevity patterns. Using the national average could over-, or underestimate, the value of a portfolio of pensioners by up to 10%. In the absence of good data, it’s prudent to err on the conservative side.
“Over the last ten years, Club Vita has identified margins of caution in the longevity assumptions of many large schemes. The challenge for trustees of “smaller” schemes, typically those with fewer than 1,000 pensioners, has been even greater. By integrating Club Vita’s models in RiskFirst’s system, the same market-leading techniques are now available to schemes of all sizes.”
Matthew Bale, Chief Strategy Officer at RiskFirst, added: “We’re delighted to give our clients access to the market-leading longevity analytics. Through our collaboration with Club Vita, actuarial consultants and individual pension plans will be able to access, at the touch of a button, fast and customised longevity assumptions.
“This continues our mission to offer the very best tools and analytics in the market for our clients, allowing us to deliver user-friendly analytics that continue to improve the interaction between advisors and their clients.”
