The Journey so far...

I used to travel for Thanksgiving every year to upstate New York to visit my family. It would take 6 hours in a crowded car. Last weekend, over Thanksgiving, my family and I spent time with family in Baltimore.


This normally 3-1/2 hour trip home took a bit over 5 hours as we moved from one congestion to another. My kids got to feel a bit of how I used to travel annually growing up. That was most of my early travel in life and we didn’t look forward to the early mornings and boring rides.

The last 6 months have been a great ride as we have been starting up Club Vita in the US. As I’ve traveled more, the less difficult it is and the more fun it has become to try to fill a day meeting as many new people as possible to spread the word of our new US longevity model. The US is an incredibly diverse place and a pleasure to experience. It has been my first visit to many of our recent destinations, surprisingly, I find myself less traveled in the US than my new British colleague, Erik.

Dan Reddy (CEO) and Erik Pickett (CPO) standing in various places of interest in the US

This is one of many reflections I’ve had as I’ve been thinking about the last 6 months. Some more things I’ve learned:

  • Marketing is crucial when you’re new to a market and trying to get noticed
  • Building a team is important to get right when there’s only a few of you and you’re growing fast
  • The UK and Canada have been using more sophisticated longevity measurement methods than the US for many years
  • Socio-economic groups not only have differences in current life expectancy, but those life expectancies are changing at different rates
  • Winter deaths exceed summer deaths by 10-15% in the US and other countries
  • Public, multiemployer and single employer plans are similar and different at the same time
  • Fish and chips really are better in London

​We’ve accomplished many things along the way:

  • We’ve published our white paper on ZIP code modeling along with extensive accompanying papers on data and modeling techniques
  • In addition to teaching the value of using ZIP code, we have shared the benefits of Generalized Linear Modeling (and reminded many actuaries what that is) and how we use multiple covariates simultaneously
  • We’ve partnered with Mercer and toured their US offices exploring our model with their consultants
  • We’ve engaged with several other actuarial firms
  • Our team has presented at Society of Actuaries’ Annual Meeting, Cass Business School’s Longevity 15, NCPERS Public Safety Conference and many other conferences
  • Some of the most forward-thinking actuaries in our community have recognized the value in our new approaches and why they are better than some traditional actuarial mortality assumption setting approaches
  • We’ve proven that our models result in a better fit for a number of large pension data sets
  • This has led to several insurance companies adopting our models, shortly to be used for pricing

We still have a way to go. A few things you can expect to see and hear from us and our partners:

  • Fiscal year-end accounting is coming up and some of Mercer’s trail-blazing clients will be using our models
  • We’ll be creating an advisory committee that will serve as the voice of plan sponsors, helping to guide our proposition.
  • We intend to build our next generation data set to include 2 million annuitants with a rich variety of data fields that will be analyzed to determine if they have an impact on longevity. With a large data set, we can set not only baseline longevity assumptions, but also research trends in longevity assumptions to provide useful insights for pension plan sponsors
  • In addition to longevity trends, we intend to publish research regarding public versus private sector mortality differences (or lack thereof), excess winter mortality, the comparison of current experience based baseline mortality adjustments with factor based approaches to longevity modeling 
​Ultimately, our goal is to elevate the discussion of longevity from assumption-setting to true risk management. Longevity is a major and unrewarded risk for all pension plans, with even the very largest of pension plans subject to longevity trend risk – a risk that cannot be pooled away

It’s been a crazy six months and as you can see, it’s not slowing down one bit. I hope to see you in the future as I travel through your city. Get in touch at the email below. I’ll reach out as we make our way across the US.

Dan

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