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Zurich Assurance Ltd. Adopts RMS Longevity Model to Support Risk Assessments
Major U.K. insurer also to use RMS model to support capital modeling
LONDON, U.K. -
October 03, 2017 -
RMS, a global risk modeling and analytics firm, today announced that Zurich Assurance Ltd. (ZAL), a major U.K. life insurer and part of the global Zurich Insurance Group, has licensed the RMS Longevity Model. ZAL will use the model to provide insights in a number of areas, including into Zurich’s liabilities arising from insurance products linked to pension funds, a key growth market for the firm.
Based on likely medical breakthroughs in the future, as well as projecting mortality trends from the past, the RMS model analyzes the complex interplay of factors expected to drive changes in life spans. By gaining a clearer understanding of this uncertainty, ZAL will be able to better manage financial risks through external risk transfer.
Simon Johnson, chief actuary for Zurich Assurance, said: “There has been a lot of recent discussion about a possible slowdown in improvements in longevity, which shows how much uncertainty there can be, even over a short period of time. We’ve partnered with RMS because their model doesn’t just look through the rear view mirror, but combines statistical techniques with the latest insights from medical research to show how longevity may change in the future, for example due to socio-economic, lifestyle and medical factors. We are pleased to be working with RMS as we continue to expand our innovative longevity risk transfer solutions for U.K. pension schemes.”
Because it includes forward-looking medical-based insights, and does not rely solely on projecting historical mortality trends into the future, the RMS model offers a more realistic analysis of future lifespans than typical longevity models. It anticipates future medical advances such as stem-cell therapies and anti-ageing science in addition to projecting the impact of changing attitudes towards personal health and fitness.
Commenting on the developing relationship with Zurich, managing director for RMS LifeRisks®, Sofia Ben El Attar, said: “Over the last year, we have supported Zurich’s longevity experts as they adopted the RMS modeling framework to support their view of longevity risk. Right across the market, we’re seeing growing interest in the way our model’s analysis, grounded in the real-world drivers of mortality improvement, is giving clients the necessary insights to manage future liabilities in line with their risk appetites.”
The RMS Longevity Model was originally developed for the life insurance and reinsurance sectors. It employs stochastic simulations along with detailed future longevity scenario analyses in real world terms that can be understood by senior decision-makers outside of modeling specialisms.
Notes to Editors
The RMS U.K. Longevity Model was developed by a team including experts in epidemiology, mathematical biology, genetics, biostatistics, financial engineering, public health policy and medical science.
RMS solutions help insurers, financial markets, corporations, and public agencies evaluate and manage catastrophe risks throughout the world. RMS has over 1,200 employees across 13 offices in the US, London, Bermuda, Zurich, India, China, Japan, Singapore and Australia - our products and models covering six continents.
We lead an industry that we helped to pioneer—catastrophe risk modeling—and are delivering models, data, and risk management solutions on the RMS(one)® platform to transform the world’s understanding and quantification of risk through open, real-time exposure and risk management.
Insurers, reinsurers, trading companies, and other financial institutions trust RMS solutions to better understand and manage the risks of natural and human-made catastrophes, including hurricanes, earthquakes, floods, terrorism, and pandemics.
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