Trends in Life Insurance 2022: How the Industry Has Changed

Link: https://www.soa.org/sections/reinsurance/reinsurance-newsletter/2022/april/rsn-2022-04-gambhir/

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Growing popularity in no-medical-exam life insurance products has had one expected outcome: More life insurance policies with accelerated underwriting options available in the marketplace. For example, Policygenius offered just three accelerated underwriting options in 2020. In 2021, that number more than doubled to seven, and more options will likely be available in 2022.

Additionally, while such policies had historically only been available to applicants who were young and in good health, the competitive market has prompted more widespread availability. Now, applicants across all health classes can get no-medical-exam policies.

While no-medical-exam policies tend to be about the same cost as fully underwritten policies, applicants tend to favor them even when they are more expensive due to the convenience and expedited turnaround time.

Author(s): Nupur Gambhir

Publication Date: April 2022

Publication Site: Reinsurance News, SOA

Rise in Non-Covid-19 Deaths Hits Life Insurers

Link: https://www.wsj.com/articles/rise-in-non-covid-19-deaths-hits-life-insurers-11645576252

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In earnings calls for the past two quarters, Globe Life Inc.,Hartford Financial Services Group Inc., Primerica Inc. andReinsurance Group of America Inc. were among insurers noting higher non-Covid-19 deaths, compared with pre-pandemic baselines.

“The losses we are seeing continue to be elevated over 2019 levels due at least in part, we believe, to the pandemic and the existence of either delayed or unavailable healthcare,” Globe Life finance chief Frank Svoboda told analysts and investors earlier this month.

Among the non-coronavirus-specific claims are deaths from heart and circulatory issues and neurological disorders, he said. “We anticipate that they’ll start to be less impactful over the course of 2022 but we do anticipate that we’ll still at least see some elevated levels throughout the year,” he said.

Primerica executives similarly cautioned in their fourth-quarter call about outsize numbers of non-Covid-19 deaths in 2022. “Some of these will be the result of delayed medical care or the increased incidence of societal-related issues, such as the increased prevalence of substance abuse,” Chief Financial Officer Alison Rand said in an email interview.

From early stages of the pandemic, many medical professionals have raised concerns about Americans’ untreated health problems, as Covid-19 put stress on the nation’s healthcare system.

Author(s): Leslie Scism

Publication Date: 23 Feb 2022

Publication Site: WSJ

U.S. Population Mortality Observations – Updated with 2020 Experience

Link:https://www.soa.org/resources/research-reports/2022/us-population-mortality/

pdf: https://www.soa.org/globalassets/assets/files/resources/research-report/2022/population-mortality-observation.pdf

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The overall age-adjusted mortality rate (both sexes) from all causes of death recorded the historically highest increase of published records dating back to 1900 of 16.8% in 2020, following a 1.2% decrease in 2019. The increase eclipsed the size of recent years’ annual volatility and exceeded the 11.7% increase in
1918 that occurred during the Spanish influenza pandemic. When COVID deaths are removed, all other
CODs’ (Cause of Death) combined mortality increased by 4.9%, which was last exceeded by a 5.6% increase in 1936.

All other CODs featured in this report had increased 2020 mortality. In many instances, the single year
mortality increases were the largest for the span of this report. Heart disease and Alzheimer’s/Dementia
had 4.7% and 7.8% increases, respectively. Other physiological CODs with lower death rates had double-digit increases. Diabetes, liver and hypertension had increases of 14.9%, 16.0% and 13.3%, respectively.
The external CODs of assaults and opioid overdoses had extreme increases at ages 15-24 of 35.9% and
61.2%, respectively.

Author(s):

Jerome Holman, FSA, MAAA, RJH Integrated Solutions, LLC
Cynthia S. MacDonald, FSA, MAAA, Society of Actuaries Research Institute

Publication Date: Jan 2022

Publication Site: SOA

Want to Be an Actuary? Odds Are, You’ll Fail the Test

Link:https://www.wsj.com/articles/actuary-credential-test-exam-bad-odds-11640706082?st=52aicn5y38okulw&reflink=article_email_share

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(the answer: B — I’ll leave it to you to verify the calculations)

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Actuaries quantify risk. One of their riskiest endeavors is trying to become one.

Among people taking at least one exam from the Society of Actuaries—the field’s biggest U.S. credentialing body—15% eventually pass the multiple tests required to become an Associate, one of two designations allowing them to practice. Just 10% pass those and additional tests to become a Fellow, the group’s higher designation, which affords bigger responsibilities and salaries.

It’s such an arduous process that the number of test-takers has been declining in recent years, and the society is making changes to keep candidates from dropping out of the gantlet. It is also adding new “predictive analytics” tests to adjust to the massive amounts of data insurers now have.

There is no limit to how many times a candidate can take the tests. It took one man 50 years to become a Fellow, says Stuart Klugman, an official at the society. The society says a candidate typically takes seven to 10 years to become a Fellow. They must pass 10 exams plus other coursework and requirements.

Author(s): Neal Templin

Publication Date: 28 Dec 2021

Publication Site: WSJ

Emerging Technologies and their Impact on Actuarial Science

Link:https://www.soa.org/resources/research-reports/2021/emerging-technologies-and-their-impact-on-actuarial-science/

Full report: https://www.soa.org/globalassets/assets/files/resources/research-report/2021/2021-emerging-technologies-report.pdf

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Technologies that have reached widespread adoption today:
o Dynamic Collaboration Tools – e.g., Microsoft Teams, Slack, Miro – Most companies are now using this
type of technology. Some are using the different functionalities (e.g., digital whiteboarding, project
management tools, etc.) more fully than others at this time.
• Technologies that are reaching early majority adoption today:
o Business Intelligence Tools (Data Visualization component) – e.g., Tableau, Power BI — Most
respondents have started their journey in using these tools, with many having implemented solutions.
While a few respondents are lagging in its adoption, some companies have scaled applications of this
technology to all actuaries. BI tools will change and accelerate the way actuaries diagnose results,
understand results, and communicate insights to stakeholders.
o ML/AI on structured data – e.g., R, Python – Most respondents have started their journey in using
these techniques, but the level of maturity varies widely. The average maturity is beyond the piloting
phase amongst our respondents. These are used for a wide range of applications in actuarial functions,
including pricing business, modeling demand, performing experience studies, predicting lapses to
support sales and marketing, producing individual claims reserves in P&C, supporting accelerated
underwriting and portfolio scoring on inforce blocks.
o Documentation Generators (Markdown) – e.g., R Markdown, Sphinx – Many respondents have started
using these tools, but maturity level varies widely. The average maturity for those who have started
amongst our respondents is beyond the piloting phase. As the use of R/Python becomes more prolific
amongst actuaries, the ability to simultaneously generate documentation and reports for developed
applications and processes will increase in importance.
o Low-Code ETL and Low-Code Programming — e.g., Alteryx, Azure Data Factory – Amongst respondents
who provided responses, most have started their journey in using these tools, but the level of maturity
varies widely. The average maturity is beyond the piloting phase with our respondents. Low-code ETL
tools will be useful where traditional ETL tools requiring IT support are not sufficient for business
needs (e.g., too difficult to learn quickly for users or reviewers, ad-hoc processes) or where IT is not
able to provision views of data quickly enough.
o Source Control Management – e.g., Git, SVN – A sizeable proportion of the respondents are currently
using these technologies. Amongst these respondents, solutions have already been implemented.
These technologies will become more important in the context of maintaining code quality for
programming-based models and tools such as those developed in R/Python. The value of the
technology will be further enhanced with the adoption of DevOps practices and tools, which blur the
lines between Development and Operations teams to accelerate the deployment of
applications/programs

Author(s):

Nicole Cervi, Deloitte
Arthur da Silva, FSA, ACIA, Deloitte
Paul Downes, FIA, FCIA, Deloitte
Marwah Khalid, Deloitte
Chenyi Liu, Deloitte
Prakash Rajgopal, Deloitte
Jean-Yves Rioux, FSA, CERA, FCIA, Deloitte
Thomas Smith, Deloitte
Yvonne Zhang, FSA, FCIA, Deloitte

Publication Date: SOA

Publication Site: October 2021

Final Report of the Activities of 2019 HMD Project

Link: https://www.soa.org/resources/research-reports/2021/activities-2019-hmd-project/

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Work accomplished under the 2019 agreement between the Human Mortality Database (HMD) team and the
Society of Actuaries (SOA) was divided between two main projects: 1) the continuous development of the United
States Mortality Database (USMDB) and 2) the publication of cause-specific mortality series for selected HMD
countries. Due to administrative delays at both the University of California, Berkeley, and the Society of Actuaries,
work on these projects did not begin until July 2019. Furthermore, due to restriction in data access associated with
the Covid-19 pandemic, a no-cost extension was requested by Magali Barbieri, the Principal Investigator for the
projects, and accepted by the SOA to extend the project beyond the initial December 31, 2019 deadline.

Author(s): Magali Barbieri, Ph.D University of California-Berkeley

Publication Date: August 2021

Publication Site: Society of Actuaries

Mortality with Meep: Cause of Death Trend — Heart Disease — 1999-2020

Link: https://marypatcampbell.substack.com/p/mortality-with-meep-cause-of-death

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The long-term trend has been improvement for this cause of death, with it most obvious for the oldest age groups. This trend has been driven by improvement in medical treatment for the condition, but also due to the decrease in smoking rates… decades ago. Some causes of death have behavior that precedes the death by decades, which can get tricky to track for our top two causes of death: heart disease and cancer. Even so, smoking cigarettes has been a huge driver for both these causes, and made a large differentiator by sex and smoking status for a long time.

Author(s): Mary Pat Campbell

Publication Date: 26 July 2021

Publication Site: STUMP at substack

Ten Pearls of Wisdom for Navigating the Changes to the SOA’s Associate Level Exams

Link: https://blog.actexmadriver.com/ten-pearls-of-wisdom

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Do not put your career on hold. Continue to take (and hopefully pass) exams during the transition period.

Remember why you started taking actuarial exams in the first place. It was probably because you wanted to become an actuary or open doors to a variety of rewarding careers that combine business and the mathematical sciences. Unless your goals have changed, you should continue to take exams during the transition period. The SOA’s transition rules are usually very generous, so unless you repeatedly fail an exam that is being discontinued, you should not worry that the time spent studying for exams will be wasted.

Publication Date: 28 July 2021

Publication Site: Actex

The Society of Actuaries Announces ASA Curriculum Changes, Micro-Credentials and Affiliate Membership

Press release: https://www.soa.org/resources/announcements/press-releases/2021/2021-asa-changes-member/

FAQ: https://www.soa.org/education/general-info/asa-micro-credentials/

Pathway comparison, more info: https://www.soa.org/globalassets/assets/files/edu/asa-pathway-changes.pdf

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Beginning in January 2022, pre-ASA candidates will also be able to begin work to earn new micro-credentials that recognize and demonstrate to employers their knowledge and skills gained along the pathway to ASA. These “milestone markers” will remain with candidates if they decide to leave the ASA pathway and are also applicable for those choosing to enter the pathway to only earn one or more micro-credential. All elements required to earn these micro-credentials are part of the ASA pathway and count in full toward earning the ASA and FSA designations.

These micro-credentials group together pathway components that represent distinct knowledge and skills to demonstrate the level of achievement candidates earn to employers, co-workers and their professional network. AQ/EQ and data science skills are driving changes to the ASA curriculum and will be incorporated into requirements for each micro-credential, allowing candidates the ability to demonstrate and build on those skills for their resume and jobs.

These micro-credentials do not make candidates qualified or “signing” actuaries; that work is reserved for those who earn the ASA and FSA designations. However, they do provide critical marks of candidates’ progress through the system and signal to employers the knowledge they’ve gained. We will be conducting an outreach program to employers to build awareness and support for the micro-credentials over the coming months.

Author(s): SOA

Publication Date: 12 July 2021

Publication Site: Society of Actuaries

Have Fun With Approximations!

Link: https://www.linkedin.com/pulse/have-fun-approximations-mary-pat-campbell/

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Pdf: https://drive.google.com/file/d/0ByabEDuWaN6FNmZhTDBYeEVrNVE/view?resourcekey=0-U4GI2_9zn4UQdWza1bq95w

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In the pre-computer days, people used these approximations due to having to do all calculations by hand or with the help of tables. Of course, many approximations are done by computers themselves — the way computers calculate functions such as sine() and exp() involves approaches like Taylor series expansions.

The specific approximation techniques I try (1 “exact” and 6 different approximation… including the final ones where I put approximations within approximations just because I can) are not important. But the concept that you should know how to try out and test approximation approaches in case you need them is important for those doing numerical computing.

Author(s): Mary Pat Campbell

Publication Date: 3 February 2016 (updated for links 2021)

Publication Site: LinkedIn, CompAct, Society of Actuaries

Several Ways to Improve Your Use of Excel for Actuarial Production

Link: https://www.soa.org/sections/small-insurance/small-insurance-newsletter/2021/june/stn-2021-06-mathys/

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Create a Consistent Structure for Calculations

When spreadsheets are created ad-hoc, the usage of time steps tends to be inconsistent: advancing by rows in one sheet, columns in another, and even a mix of the two in the same sheet. Sometimes steps will be weeks, other times months, quarters, or years. This is confusing for users and reviewers, leads to low trust, increases the time for updates and audits, and adds to the risks of the spreadsheet.

A better way is to make all calculations follow a consistent layout, either across rows or columns, and use that layout for all calculations, regardless if it requires a few more rows or columns. For example, one way to make calculations consistent is with time steps going across the columns and each individual calculation going down the rows:

Author(s): Stephan Mathys

Publication Date: June 2021

Publication Site: Small Talk at the Society of Actuaries

Impact of COVID-19 on Actuarial Careers: Highlights Report

Link: https://www.soa.org/resources/research-reports/2021/covid-19-highlights/

Report link: https://www.soa.org/globalassets/assets/files/resources/research-report/2021/covid-19-highlights.pdf

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Working from home was a significant change for most actuaries. While some are looking forward to
returning to work in the office, few would like to return to working in the office most or all of the time.
After COVID-19 restrictions are fully lifted, approximately 65% of full-time respondents would prefer to
work from home at least 3 days per week: 28% would prefer to work from home three days per week, 23%
would like to work from home every day, and 14% would prefer to work from home 4 days per week.

In general, respondents who identify as women have a slight preference to work from home more
frequently than do respondents who identify as men.

Author(s): SOA

Publication Date: June 2021

Publication Site: Society of Actuaries