CMI insurer survey: pandemic expected to have little impact on future mortality improvements

30 June 2022

Insurers and reinsurers currently believe that, on average, the impact of Covid on future mortality improvements will affect life expectancy by less than 1%. That’s according to the latest survey from the Continuous Mortality Investigation (CMI). The CMI’s annual benchmarking survey looks at how insurers and reinsurers use the CMI Mortality Projections Model to make projections of future mortality.
We know how the pandemic has affected mortality rates during 2020 and 2021, but the effect on future rates is less clear. Respondents were asked to give a best estimate view of the pandemic’s impact on future mortality improvements. Over half of respondents indicated no change in life expectancy at age 65 at the end of 2022, with the remaining respondents indicating falls of either 0.5% or 1%. No respondents indicated a rise in life expectancy.

Those responding indicated that they were comfortable with the CMI’s approach of placing no weight on the data for 2020 or 2021 in the core CMI Model. The CMI encourages users of the CMI Model to make appropriate adjustments to the core assumptions to reflect the purpose that it is being used for. However, no respondents placed any weight on the data for 2020 and only one expects to place any weight on the data for 2021.

Cobus Daneel, Chair of the CMI Mortality Projections Committee, said: “Although it is early days in terms of understanding the full impact of the pandemic, this survey has given us an opportunity to see how insurers and reinsurers view its effect on future mortality improvements. As the situation is still evolving, we will continue to monitor this through our annual survey to see if views change.
“We are encouraged by the widespread adoption of the latest versions of the CMI Model, and that the core version of the Model aligns closely with industry views.”

~ENDS~

Contact
Sonia Sequeira, Media Relations Manager, IFoA
Tel: 07525 592 198
Email: sonia.sequeira@actuaries.org.uk

Notes to Editor

1. The CMI issued the CMI Model 2022 benchmarking survey in April 2022. It received responses from 20 of its subscribers – 12 insurers and 8 reinsurers – covering 40 books of business.
2. The survey showed that:
   a. CMI_2020 was the most commonly used Model version at 31 December 2021.
   b. Of those respondents who indicated a likely Model version for 31 December 2022, around half indicated CMI_2021, with the other respondents using either CMI_2019 or CMI_2020.
3. The survey results also include detailed information on parameters used in the CMI Model, and differences between insurers and reinsurers and between longevity and mortality protection books of business.
4. We expect to carry out a similar survey annually. The full survey results are only available to CMI subscribers.

About the Continuous Mortality Investigation

Continuous Mortality Investigation Limited (‘the CMI’) is wholly owned by the Institute and Faculty of Actuaries but has an independent executive and management.

The CMI’s mission is to produce high-quality impartial analysis, standard tables and models of mortality and morbidity for long-term insurance products and pension scheme liabilities on behalf of subscribers and, in doing so, to further actuarial understanding.

About the Institute and Faculty of Actuaries

The Institute and Faculty of Actuaries (IFoA) is a royal chartered, not-for-profit, professional body.

Research undertaken by the IFoA is not commercial. As a learned society, research helps us to fulfil our royal charter requirements to further actuarial science and serve the public interest.
Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.

Members of the IFoA have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s of London.
Members are governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of actuaries in society.

The IFoA is available to provide independent expert comment to the media on a range of actuarial-related issues, including COVID-19 and its long term consequences, mortality, pensions, life and general insurance, health and care, finance and investment, climate change and sustainability, systems thinking, uncertainty and judgement, and risk management.