Solvency Requirements for Life Annuities: Some Comparisons

2008 ◽  
Author(s):  
Annamaria Olivieri ◽  
Ermanno Pitacco
Keyword(s):  
Solvency Requirements ◽  
Life Annuities

Solvency requirements for pension annuities

2003 ◽  
Vol 2 (2) ◽  
pp. 127-157 ◽  
Author(s):  
ANNAMARIA OLIVIERI ◽  
ERMANNO PITACCO
Keyword(s):  
Capital Allocation ◽  
Pension Plans ◽  
Insurance Companies ◽  
Longevity Risk ◽  
Present Value ◽  
Mortality Trends ◽  
Solvency Requirements ◽  
Life Annuities

This paper deals with solvency requirements for life annuities portfolios and funded pension plans. Particular emphasis is devoted to longevity risk, i.e. the risk arising from uncertainty in future mortality trends. This risk must be faced by insurance companies and pension plans that have guaranteed lifelong payoffs.Solvency is investigated referring to immediate annuities, and hence the so-called decumulation phase is addressed. To assess solvency, assets are compared with the random present value of liabilities. Several requirements are considered, each leading to a required asset level that must be financed both with premiums (or contributions) and capital allocation.

scholarly journals Mandatory annuitization and money's worth: evidence from Singapore

2021 ◽  
pp. 1-20
Author(s):  
Joelle H. Fong ◽  
Jackie Li
Keyword(s):  
Expected Value ◽  
Longevity Risk ◽  
Future Trends ◽  
The Past ◽  
The Future ◽  
Population Mortality ◽  
Mortality Improvement ◽  
Life Annuities ◽  
Compulsory Purchase ◽  
The Impact

Abstract This paper examines the impact of uncertainties in the future trends of mortality on annuity values in Singapore's compulsory purchase market. We document persistent population mortality improvement trends over the past few decades, which underscores the importance of longevity risk in this market. Using the money's worth framework, we find that the life annuities delivered expected payouts valued at 1.019–1.185 (0.973–1.170) per dollar of annuity premium for males (females). Even in a low mortality improvement scenario, the annuities provide an expected value exceeding 0.950. This suggests that participants in the national annuity pool have access to attractively priced annuities, regardless of sex, product, and premium invested.

On the Demonstration of Formulæ connected with Interest and Annuities

1854 ◽  
Vol 4 (4) ◽  
pp. 277-282
Author(s):  
De Morgan
Keyword(s):  
Actual Use ◽  
The Subject ◽  
Life Annuities

In most branches of mathematics, the actual use of fundamental processes in the form which the first definitions suggest, is often supplanted, either by processes of greater skill, or by the use of pure reasoning. In the subject of which this paper treats, there has not been much attempt to connect formulæ by reasoning. The actual exhibition of successive annual results has been the only method extensively employed; and it throws the required total result into a series of terms: this series is either algebraically summed, or calculated term by term for insertion in a table.The present paper is intended to show that this summation of algebraical series may be dispensed with, at least in questions of annuities certain : and also that common points of principle, which the ordinary methods leave altogether out of sight, will reduce many questions of life annuities to an absolute coincidence of form with the corresponding questions of ordinary annuities.

The Problem of Solvency in Life Assurance

1966 ◽  
Vol 92 (2) ◽  
pp. 193-197 ◽  
Author(s):  
Hans Ammeter
Keyword(s):  
Economic Integration ◽  
Lively Discussion ◽  
Life Assurance ◽  
Solvency Requirements

In the train of the economic integration of Europe, a lively discussion has, for some time, been carried on about appropriate criteria of solvency for insurance undertakings in respect of life and non-life assurance. The conflict over the proposals for solvency requirements in non-life assurance still occupies the foreground. Here it is the proposed directive put up for discussion by the E.E.C. authorities which is of particular importance. This directive puts forward quantitative conditions for the solvency reserves of companies carrying on non-life business.

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