Scenario Models of Excess Mortality
For each life catastrophe peril, models are developed from a detailed understanding of the fundamental causes, and combined into probabilistic simulations of thousands of potential scenarios.
Understanding Pathogens
Sampling from the full range of potential attributes of the viruses that
can cause a future epidemic generates a range of pathogen scenarios
Epidemiological Modeling
Each pathogen scenario is simulated using population spread models. Government response measures and medical treatments are simulated. Insured populations have different death rates to the general population.
Frequency-Severity Distributions
Insurance losses from compensation payouts are calculated. The universe of scenarios provides an exceedance probability of loss that can be used for risk capital estimation.
Pathogen Characteristics
Infectiousness: High (R0 of 2.25)
Virulence: Moderate (1% Case fatality rate)
Age profile of mortality shows highest impact on ages <40
Epidemiology Consequences
40% of the population are infected in 6 months • Tamiflu stocks exhausted Vaccine is late to arrive and has low efficacy • Primary healthcare and hospital capacity is overwhelmed • Causes excess mortality of 0.6 per mille on a typical life insurance portfolio
Scenario Models of Longevity
The RMS Longevity Risk model consists of thousands of scenarios of how the future may develop. Each vision of the future is a combination of the way each cause of mortality improvement may play out. This approach blends best-of-class actuarial techniques with medical science.
Phase One: A foundation in actuarial science
Statistical projections of past mortality experience are proven and powerful tools of actuarial expertise. But extrapolating past volatility can project medically implausible futures.
Phase Two: Overlaying A Vitagion Structure
RMS enhances statistical projection models by adding future projections by causes of improvement, using five 'vitagion' categories. This provides realistic medical constraints on what could happen in the future
Phase Three: Multi-disciplinary Scientific Research
The parameterization of vitagion models is informed by a detailed research program of best-of-class data from many other disciplines, combined with sub-models of medical outcomes
Example of an extreme trajectory
of improvements from the RMS
Longevity Model
Fast Increase in Healthier Lifestyles
Smoking becomes de-normalized; Obesity trends slow dramatically.
Rapid Progress in Medical Intervention
Cancer management improves dramatically.
New monoclonal antibody drugs are effective and cheap.
Continued reduction of premature deaths from cardiovascular disease.
