Considerable attention is currently being devoted in insurance work (and notably in the actuarial work) to the management of life annuity portfolios and to annuity product design, because of the growing importance of annuity benefits paid by private pension schemes and individual policies.
In particular, the progressive shift in many countries from defined benefits to defined contribution pension schemes has increased the interest in life annuity products with a guaranteed periodic benefit.
Nevertheless, various “weak" features of the (traditional) life annuity should be noted, looking at the product from both the annuity provider's and the customer's perspective.
However, many features can be improved by moving from the traditional standard products to more complex products, for example by adding appropriate riders (that is, supplementary benefits), or by adopting restrictions in the age intervals covered, or by allowing for individual risk factors hence “tailoring" the annuity rates (at least to some extent) to specific customer’s features.
In this web session, special attention will be placed on age restrictions (to define, for example, the “old-age” life annuities, also named “longevity insurance” annuities) and on special-rate (or underwritten) life annuities.
Organised by the EAA – European Actuarial Academy GmbH.
