Global catastrophe risk modeller RMS’ Longevity Model has been adopted by UK life insurer, Zurich Assurance Ltd., as the firm seeks to better understand its view of longevity risk.
Zurich Assurance is a division of global insurer Zurich Insurance Group, and, according to a recent announcement has licensed the RMS Longevity Model.
RMS developed the model for the life insurance and reinsurance sectors, providing companies with comprehensive data and future longevity scenarios so that firms can better understand their current, and future longevity exposure and make improved decisions about how to manage the risk.
Solutions related to pension funds is a growing area for Zurich, and the company will utilise the RMS model to gain a better insight and understanding into its liabilities in the longevity space.
Chief Actuary for Zurich Assurance, Simon Johnson, commented; “There has been a lot of recent discussion about a possible slowdown in improvements in longevity, which shows how much uncertainty there can be, even over a short period of time.
“We’ve partnered with RMS because their model doesn’t just look through the rear view mirror, but combines statistical techniques with the latest insights from medical research to show how longevity may change in the future, for example due to socio-economic, lifestyle and medical factors. We are pleased to be working with RMS as we continue to expand our innovative longevity risk transfer solutions for U.K. pension schemes.”
The model projects both mortality trends of the past and likely medical advances to analyse the inherently complex and varied factors that impact how long people live in different parts of the world. Zurich expects to be able to better understand and manage financial exposures via external risk transfer once it has a better grasp of its longevity risk, provided by its use of the RMS Longevity Model.
Managing Director for RMS LifeRisks®, Sofia Ben El Attar, added; “Over the last year, we have supported Zurich’s longevity experts as they adopted the RMS modeling framework to support their view of longevity risk. Right across the market, we’re seeing growing interest in the way our model’s analysis, grounded in the real-world drivers of mortality improvement, is giving clients the necessary insights to manage future liabilities in line with their risk appetites.”