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Pensions & benefits

Mortality, longevity and demographic modelling

Understanding longevity risk is a fundamental building block for managing a DB pension scheme. Getting it right will lead to better member outcomes. 

Our longevity advice uniquely draws from our multi-disciplinary team, combining actuarial modelling with real-world health insights to provide trustees and employers with robust forward-looking scenarios to help them make better decisions. 

We tailor our advice to our clients’ specific circumstances, providing them with both reliable insights and a better understanding of their risks.

Understanding longevity risk helps clients achieve better outcomes for their members – whether it is changing the pace of a journey plan, assessing the value of an insurance transaction, understanding whether a surplus could be used for enhancing member benefits, setting appropriate accounting assumptions, or ensuring investment hedging or cashflow matching strategy is accurate.

We work closely with our actuarial team to ensure all our clients benefit from fully-informed assumptions setting.

We also advise large pension schemes on a standalone basis who wish to benefit from the valuable longevity insights our team can provide.

Though our unique approach, we can help:

  • Form a robust assessment of suitable current mortality rates for a scheme's membership using our in-house model, LifeAnalytics. This combines the profile of the scheme’s membership with recent mortality experience. Our modelling approach is comparable to that of leading insurers and reinsurers.
  • Analyse how longevity rates may change in the future. We combine historical trends with real world insights to provide a best-estimate assumption tailored to a scheme. 
  • Understand what plausible future pathways could transpire to give a clear understanding of the risk associated with how long members may live. We consider questions such as:
    • When will the NHS recover from its current strains, and what impact will this have?
    • How will the future look for different subsets of the population, tailored to a scheme's membership?
    • How will the treatment and prevalence of diseases such as cardiovascular disease progress into the future?
    • How can different future pathways be expressed in the CMI mortality projections model?

Our longevity advice can support a range of decision-making, including:

  1. Setting appropriate mortality assumptions for scheme funding or accounting purposes
  2. Undertaking comprehensive estimates and value-for-money analysis of buy-in or longevity swap pricing
  3. Setting appropriate longevity risk reserves to support a long-term run-off strategy
  4. Forming a thorough assessment of your liability profile to support a cashflow-driven investment strategy.

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If you would like to know more about our services and how we can help you with pensions and benefits.

Contact us