Speakers: Johannes Lörper, Franziska Foellmer
Insuring longevity is one of the most important tasks of German life insurance companies. The main products for this protection are annuities. In reserving for, designing and supervising these products, actuaries have been facing strong increases in life expectancy over the last decades. Additionally German annuity products commonly have long duration and offer capital guarantees. All this induces a special need for reliable mortality tables and a secure reserve basis. In 2004 the German Actuarial Association (DAV) published a longevity study and the corresponding DAV2004R reserve table. This is the main source of information on annuitants’ mortality in private insurance. The regular review of the table has recently been completed and brought insights in today’s mortality of annuitants in Germany.
This presentation will describe data sources and methods used for deriving a base table for reviewing purposes, as well as extrapolation methods and deliberations on future trends used for the review. Then we discuss the results of the review, emphasizing the need for safety margins in valuating this long term guarantee business.
Description of Application Scenarios
The table reviewed is one of the most important tables in the German life insurance market. Most companies use it for reserving purposes.
Body of Literature
The findings here are based on research of the biometric risk working group of the DAV. The relevant publication can be found on DAV’s web page: