Newark, California - April 27, 2017 RMS, a leading risk modeling and analytics firm, today announced that Punter Southall is the latest pension fund advisor to license the RMS® Longevity Model.
By using the RMS model Punter Southall, a leading firm of actuarial and investment consultants, will provide its clients with advice based on better informed views of longevity risk. The RMS model reflects the future medical breakthroughs that influence mortality rates compared to those extrapolated from historical trends alone. This helps both trustees and sponsors to better understand and manage pension-related risks.
“We have entered a period of volatile mortality rates, in which both medical advances and healthier lifestyles are contributing to increasing longevity, and our consulting and solutions need to continually reflect this changing landscape. The RMS Longevity Model helps us achieve this,” said Dan Auton, longevity specialist at Punter Southall. “The scientific results from the sophisticated RMS stochastic model, combined with our existing knowledge and experience, enable us to provide new insights to understanding and managing longevity risk.”
Traditional longevity risk models typically only use historical mortality data to project future views of risk. While the RMS Longevity Model similarly uses historical data, it also incorporates data on how lifestyles are changing – for example the rise in obesity rates. In addition, the model accounts for medical advances becoming a reality, such as personalized cancer treatments, stem-cell therapy, nano-medicine, and anti-ageing therapies.
Punter Southall will have access to stochastic simulations of future life expectancy, and has also licensed the RMS deterministic longevity scenarios to help provide its pension fund clients with a more definitive understanding of why the headline longevity risk metrics might change.
Sofia Ben El Attar, managing director of LifeRisks at RMS said: “The RMS Longevity Model has long been used by the (re)insurance industry to manage this risk. Now pension fund advisors are also benefitting from the same scientific and statistical insight to help de-risk their clients’ funds. This has additional benefits for both sides of a risk transfer transaction, as they are able to assess longevity risk using the same metrics. This use of a comparable analysis facilitates more straightforward negotiations on pricing.”
Notes to Editors
The RMS U.K. Longevity Model was developed by a team of experts in epidemiology, mathematical biology, genetics, biostatistics, financial engineering, public health policy and medical science.