Willis Towers Watson publishes its fourth Older Age Mortality Study for U.S. life insurers

ARLINGTON, Va., Feb. 06, 2017 -- Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking and solutions company, today announced the release of The Older Age Mortality Study 4 (TOAMS 4), the company's fourth study of U.S. life insurance industry mortality. TOAMS is the most comprehensive, longest-running study of older age mortality experience in the market, with the original TOAMS edition released in 2005.

This latest mortality study has expanded to include all ages and covers the four-year experience period from 2011 to 2014. For the first time, the report is centered on predictive analytics results, supported by a comprehensive model in Willis Towers Watson’s proprietary predictive modeling software, Emblem. This analysis allowed a better study of mortality drivers and the impact of those drivers, particularly how it might change over time or by attained age. In addition, similar to prior TOAMS studies, it includes results from a classical mortality study approach.

“Predictive modeling using generalized linear models has enabled us to provide valuable insights into the drivers of recent mortality experience and offer unique insights into how interrelationships among underlying factors can impact mortality results over time,” said Kim Steiner, experience analysis lead, Life Insurance practice, Willis Towers Watson. “This approach, in conjunction with classical analysis, allowed us to make the best use of limited data, e.g., higher face amounts of $2.5 million-plus, to give us the best prediction of mortality.”

Key findings of the study include:

• Overall, classical mortality is 95% of the 2015 Valuation Basic Tables (VBT) by face amount and 109% of the 2008 VBT by policy count.
• Significant variation by product is observed. For some products, the differential generally wears off, at least to some extent, by attained age 95, and for other products, a relatively constant differential by duration is observed.
• A spike in mortality occurs just before common underwriting breakpoints, e.g., higher results just before face amount where underwriting switches from nonmedical to medical.
• Results suggest that company is still a significant predictor of overall mortality even after controlling for other variables.
• Results for TOAMS 4 are materially higher at certain older attained ages (85-plus) than previous studies and potentially reflect increased reporting of deaths due to regulatory scrutiny.

About the study

The 23 participating companies provided $25 trillion of face amount representing over 123 million policy years of exposure. Over 1.5 million deaths in the study represent $82 billion of death claims. TOAMS 4 provides detailed results focusing on gender, smoking status, product, face amount and risk class. The classical experience study was performed on an issue age and duration basis, using select and ultimate versions of the Society of Actuaries 2008 and 2015 VBT.

Now available for purchase by nonparticipants, the TOAMS 4 package includes a detailed report that shows results from both the traditional experience analysis and the predictive modeling analysis, and also includes the TOAMS 4 Query Tool. With the tool, you can use specific criteria to create customized reports from the TOAMS 4 database. To purchase the complete TOAMS 4 report with predictive modeling analysis or arrange a brief discussion with our team for more information, email [email protected].

About Willis Towers Watson

Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

Media contact
Josh Wozman: +1 703 258 7670
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