projections – Actuarial News

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The current setup is nothing like the situation following WWII. Don’t expect another baby boom.
Instead, expect a massive wave of boomer retirements (already started) that will pressure Medicare and Social Security.
Depending on the kindness of foreigners to increase demand for US treasuries is not exactly a great plan.
Artificial Intelligence (AI) will undoubtedly increase productivity. But that is not going to offset the willingness of Congress to spend more and more money on wars, defense, foreign aid, child tax credits, free education, and other free money handouts, while trying to be the world’s policeman.

Author(s): Mike Shedlock

Publication Date: 12 Feb 2024

Publication Site: Mish Talk

2022 Mortality Improvement Survey Report

December 8, 2022December 8, 2022 Mary Pat Campbell

Link: https://www.soa.org/resources/research-reports/2022/mort-improve-survey/

Report PDF: https://www.soa.org/4ad811/globalassets/assets/files/resources/research-report/2022/mort-improve-survey.pdf

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The Committee on Life Insurance Mortality and Underwriting Surveys of the Society of Actuaries sent
companies a survey in May of 2019 on mortality improvement practices as of year-end 2018. The survey
results were released in January 2022. The survey was completed by respondents prior to the onset of
COVID-19. The present report provides an opportunity to update the results for pandemic-based changes
and compare the before and after surveys.
The 2022 survey was opened in March 2022 and closed by the end of April. Thirty-five respondent
companies participated in this survey, with 29 from the U.S. and six from Canada. This group was further
divided between direct writers (26) and reinsurers (nine).
This survey focused on the use of mortality improvement and how it has changed for financial projection
and pricing modeling following the initial stages of COVID-19. Details regarding assumptions and opinions
on mortality improvement in general were asked of the respondents.
National Association of Insurance Commissioners discussions on mortality improvement factors due to
COVID-19 for reserving purposes have taken place, but this survey was conducted before any adjustments
reacting to them.
Seventy-four percent (26 of 35) of respondents indicated using durational mortality improvement
assumptions in their life and annuity pricing and/or financial projections. Moreover, of those that used
durational mortality improvement assumptions, attained age and gender were the top two characteristics
in which assumptions varied.
Respondents were asked to indicate the different limitations when applying durational mortality
improvement assumptions. The Survey found that the most common lowest and highest attained age to
which durational mortality improvement was applied were 0 and about 100, respectively. The lowest and
highest durational mortality improvement rate ranged from -1.50% (deterioration) to 2.80%
(improvement). The time period in which the mortality improvement rates were applied ranged from 10 to
120 years, but this varied between life (10/120) and annuities (30/120). The most common time period was
20 to 30 years for life; less consensus was seen for annuities. Analysis is provided in Appendix C for
instances when highlights are shared in the body of the report.

Author(s): Ronora Stryker, Max Rudolph

Publication Date: December 2022

Publication Site: SOA Research Institute

COVID-19 and the Short-Term Impact on Future U.S. Mortality

August 21, 2022August 21, 2022 Mary Pat Campbell

Link: https://www.soa.org/resources/research-reports/2022/covid-19-short-term-impact-us-mort/

PDF of report: https://www.soa.org/4a28d8/globalassets/assets/files/resources/research-report/2022/covid-19-short-term-impact-us-mort-report.pdf

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Excess mortality is expected to occur for all years studied with amounts varying by year and age.
Although the largest mortality excess numbers for the U.S. general population are foreseen for
2022, excess mortality is expected to decline each year so that by 2030, excess mortality numbers
are nearing expected levels. For 2030, mortality is projected to be 2% higher than expected for all
ages except age 85. At this age, 2030 projected mortality is estimated to be 1% higher than
expected.
Based on the average of the participants, generally, the amount of mortality excess is anticipated to be highest at the younger ages. For example, for 2022, projected mortality is anticipated to be 14% higher
compared to expected levels for age 25, 13% higher for age 45, and 10% higher for ages 65 and 85.

Author(s): Ronora Stryker, ASA, MAAA

Publication Date: August 2022

Publication Site: Society of Actuaries

The Teacher Retirement System of Texas needs to adjust its investment return assumptions

August 10, 2022August 10, 2022 Mary Pat Campbell

Link: https://reason.org/commentary/the-teacher-retirement-system-of-texas-needs-to-adjust-its-investment-return-assumptions/

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An adjustment of the assumed rate of return down to 7.0% means the plan will recalculate pension debt upwards in 2023, but will also be better positioned to avoid future debt growth over the longer run. The forecast in Figure 2 compares the growth of TRS’ unfunded liabilities under three scenarios:

Returns meet TRS assumptions;
TRS experiences two major recessions over the next 30 years;
And, TRS makes actuarially determined contributions (also using the two-recession scenario).

With this actuarial modeling of the system, it is clear that statutorily limited contributions will continue to pose funding risks for TRS that will be borne by Texas taxpayers. A proposed 7.0% assumed return will readjust 2023 unfunded liabilities upwards by $6.5 billion, but the plan will suffer fewer investment losses over the next 30 years when the plan inevitably experiences returns that diverge from expectations. TRS’ unfunded liabilities will remain elevated under the rigid statutorily-set contributions. If, however, TRS was to transition to Actuarially Determined Employer Contributions (ADEC) each year, then even by recognizing higher 2023 debt (under a 7.0% assumption) TRS could shave billions off its unfunded liabilities by 2052 ($74.7 billion down from $81.3 billion with current 7.25% assumption).

Author(s): Anil Niraula, Zachary Christensen

Publication Date: 15 Jun 2022

Publication Site: Reason

Is The Worst Over? Models Predict A Steady Decline In COVID Cases Through March

September 24, 2021September 24, 2021 Mary Pat Campbell

Link:https://www.npr.org/sections/health-shots/2021/09/22/1039272244/is-the-worst-over-modelers-predict-a-steady-decline-in-covid-cases-through-march?utm_source=facebook.com&utm_term=nprnews&utm_campaign=npr&utm_medium=social

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The most likely scenario, says Lessler, is that children do get vaccinated and no super-spreading variant emerges. In that case, the combo model forecasts that new infections would slowly, but fairly continuously, drop from about 140,000 today now to about 9,000 a day by March.
Deaths from COVID-19 would fall from about 1,500 a day now to fewer than 100 a day by March 2022.
That’s around the level U.S. cases and deaths were in late March 2020 when the pandemic just started to flare up in the U.S. and better than things looked early this summer when many thought the pandemic was waning.
And this scenario projects that there will be no winter surge, though Lessler cautions that there is uncertainty in the models and a “moderate” surge is still theoretically possible.
There’s wide range of uncertainty in the models, he notes, and it’s plausible, though very unlikely, that cases could continue to rise to as many as 232,000 per day before starting to decline.

Author(s): Rob Stein, Carmel Wroth

Publication Date: 22 Sept 2021

Publication Site: NPR

Not With a Bang, But a Whimper: Demographic Decline Undermines Public Finance

May 28, 2021May 28, 2021 Mary Pat Campbell

Link: https://marypatcampbell.substack.com/p/not-with-a-bang-but-a-whimper-demographic

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The last time the Census Bureau did a population projection, the estimated population for even 2020 came in a little high. From March 2018: Demographic Turning Points for the United States: Population Projections for 2020 to 2060 — they estimated a total population of about 332.6 million, and the apportionment Census results were 331.1 million. To be sure, this is a less than 0.5% difference, so no big deal.
This is the growth rate they projected, even in 2018:
2020-2030: 7%
2030-2040: 5%
2040-2050: 4%
2050-2060: 4%
Those are full-decade growth rates. That’s before the pandemic has shaved our numbers down a little.
Would you like to know the growth rates from prior decades?
2010-2020: 7%
2000-2010: 10%
1990-2000: 13%
1980-1990: 10%

Author(s): Mary Pat Campbell

Publication Date: 28 May 2021

Publication Site: STUMP at substack

Forecasters Predict COVID-19 Case Counts Will Keep Falling

March 4, 2021March 4, 2021 Mary Pat Campbell

Link: https://www.thinkadvisor.com/2021/03/04/forecasters-predict-covid-19-case-counts-will-keep-falling/

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Forecasters are predicting that U.S. COVID-19 case counts and the U.S. COVID-19 death numbers will continue to improve over the next four weeks.
Most of the forecasters in the COVID-19 Forecast Hub system say weekly new case counts will be somewhere between 350,000 and 450,000 over the next four weeks, compared with an actual number of about 477,000 recorded during the week that ended March 1.
The forecasters are predicting the number of deaths per week will fall to about 6,000 to 8,000, from about 14,000 per week, over that same four-week period.

Author(s): Allison Bell

Publication Date: 4 March 2021

Publication Site: Think Advisor

DiNapoli: Tax Revenues Through December Were $2.5 Billion Lower Than Last Year

February 12, 2021 Mary Pat Campbell

Link: https://www.osc.state.ny.us/press/releases/2021/01/dinapoli-tax-revenues-through-december-were-25-billion-lower-last-year

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State tax receipts through the first nine months of the state fiscal year were $2.5 billion lower than last year, but were $1.8 billion higher than anticipated by the state Division of the Budget (DOB), according to the monthly State Cash Report released by New York State Comptroller Thomas P. DiNapoli.
Tax receipts in the month of December totaled $8.4 billion, $422.5 million above last year, and $1.4 billion above DOB’s latest projections.

Author(s): Thomas P. DiNapoli

Publication Date: 15 January 2021

Publication Site: Office of the New York State Comptroller