The longevity challenge of care annuities

For most of the life industry, getting policyholder longevity predictions accurate to a few months of the realised experience would be cause for celebration. But for care annuity provider Partnership, this level of accuracy could be disastrous. Aaron Woolner reports on how it handles the challenge

Movements in life expectancy are by their very nature slow paced; the general consensus is that developed economies saw life expectancy increase by about three years during the past two decades. But even at this pace improvements in longevity have been – in tandem with accounting changes – one of the main drivers ending the defined benefit pension models.
Promises made at a time when retirees could expect a post-retirement lifespan of a decade at most became very expensive when improvements in