惠悦-如何定制年金产品.ppt

Designingannuityproductsforconsumersneeds PresentedbyMikeWadsworthPartner WatsonWyattmike wadsworth May2003 Agenda OptionsforgeneratinglifetimeincomeConsumerneedsInvestingforlifeManagingsurvivalAnewmodel Idon twanttoachieveimmortalitythroughmywork Iwanttoachieveitbynotdying WoodyAllen Peoplewillsoonlivetwiceaslongastoday andhavethepotentialtolivefor1200years JohnHarris ScientistMemberofUKHumanGeneticsCommissionasreportedSundayTimes 25June2000 Funeralfirmhitby29 profitfallNotenoughpeoplearedyingintheUS accordingtoServiceCorporationInternational theworld slargestfuneralservicescompanyTimes 2October1999 ScaleofopportunitiesPeopleover65 Source USBureauoftheCensus Annuityversusbondyield Incometakenmonthlyinadvance interestrate5 paAnnuityincomebrokendownintocapitalelementandthebalance ieinterestelement Optionsforretirementincome 100 PensionerInvestmentGuarantees PensionerSurvivalGuarantees TraditionalAnnuity LumpSum WatsonWyattPartners2000 0 0 TraditionalannuitiesSomeimportantquestions Howmuchdotheguaranteescost Howvaluablearetheytocustomers earlyinretirement laterinretirement accordingtootherassets Howwilllifestylesandneedschangeinretirement Willcustomerschangetheirmindsovertime KeyissuesfordesignThePensioner Choice investment Flexibility income Protection survival Communication tradeoffs Failsafe AlifetimeassetallocationmodelTraditional Eitherlumpsum Orannuity Retire Retire Optimumreturn equities Optimumreturn equities Cash Bonds Bonds WatsonWyattPartners2000 AlifetimeassetallocationmodelProposed Optimumreturn equities Optimumreturn equities Bonds Retire WatsonWyattPartners2000 Effectofinvestmentgrowthonsupportableincome males Baseincomesupportablecalculatedat5 Incomemultiple incomesupportableassumingextrainvestmentreturnresultingfromequityinvestmentof1 2 3 4or5 paaftercharges dividedbybaseincome Mortalityaspreviously WatsonWyattPartners2000 Planningretirementincome Theconsumerproblemis HowlongwillIlive Lifespanisadistributionnotanexpectation DistributionofdeathsRetirementatage60 Mortality PMA92 PFA92Yearofuse2001 WatsonWyattPartners2000 Distributionofdeathsbyagenow Age75now WatsonWyattPartners2000 Mortality PMA92 PFA92Yearofuse2001 Distributionofdeathsbyagenow Age90now WatsonWyattPartners2000 Mortality PMA92 PFA92Yearofuse2001 Standarddeviationofdeaths asaproportionoflifeexpectancy Mortality PMA92 PFA92Yearofuse2001 WatsonWyattPartners2000 MethodofcalculationNon annuitisedfundIncomeeachyeardefinedas Fundvalue annuityfactorAnnuityfactorcalculatedatassumedinvestmentreturnof0 or7 pa excludingexpenses Investmentreturnachievedequalto7 pa excludingexpenses Investmentreturnassumed exclexpenses Investmentreturnachieved 7 pa exclexpenses WatsonWyattPartners2000 Progressionofincome spreadingfundoverfuturelifeexpectation Progressionofincome annuitisedfundversusnon annuitisedfund WatsonWyattPartners2000 Supplierviewofmortalityguarantees MortalityimprovingHowfast1 pa 2 pa 3 pa Infuture Scopetoreview Guaranteesare too expensive Mortalitydrift uncertainfutureimprovements Bothchartsshowexpecteddistributionofdeathsformaleaged60in1992 allowingforfutureimprovements PMA92representsthemorerecentestimate Cross subsidyoperatesacrosseitherdistribution andlongevityprotectionislargelyretainedevenifmortalityisreviewed Driftinanticipateddistributionallowingfornewerevidence WatsonWyattPartners2000 Excesssurvivors PMA92comparedwithPMA80 Costtoannuityproviderofnotreviewingmortalityrelatestopaymentsmadetothosesurvivorswhowerenotexpectedtolivesolong theredzone WatsonWyattPartners2000 Newmodel Investmentfund Insuranceagainstsurvival Lifetimeincomemodel benefitstatement UnitsUnitPriceValue StartofYear10 00010 00100 000AnnuityPayments 975 10 000 SurvivalBonus2953 000EffectofChangesinUnitPrice4 860EndofYear9 32010 5097 860TargetIncomeforNextYear10 000 WatsonWyattPartners2000 Equivalentadditionalfundgrowthresultingfrommortalitycross subsidy Mortality PMA92 PFA92CalendarYear2001 WatsonWyattPartners2000 Equivalentadditionalfundgrowth MF pa pa754 12 88513 18 49533 221 2NB Partialsurvivalprotectionpossible Flexibleannuityreviewcycle Initialmax minincomecalc d Annuitantselectsincomebetweenmaxandmintonextreview Paymentsdeductedaccordingtoannuitantrequirements survivalcredits investmentreturnsadded Fundbalancedeterminedatreview Max minincometonextreviewcalc d WatsonWyattPartners2000 FlexibleincomeThecorridor Incomelevelchosenbytheannuitant annualmaximum annualminimum WatsonWyattPartners2001 CommunicationofbenefitsIncomeprojections incometakeninitially incomesupportableat7 pa WatsonWyattPartners2000 Incomeprojections incometakeninitially 1 1xincomesupportableat7 pa WatsonWyattPartners2000 Incomeprojections incometakeninitially 0 9xincomesupportableat7 pa WatsonWyattPartners2000 Incomeprojections variableinvestmentmodel WatsonWyattPartners2000 Failsafe Defaultinvestmentstrategies egequitiesbondsoverlifetimeProgrammedswitchingtoguaranteeathighageProgrammedswitchingtoguaranteeonsustainedmarketfall egJapanscenarioVoluntaryswitchingNB Morefeaturesbettersystems Annuitydevelopments unbundlingdynamic Moreimpairedlife enhancedannuities Otherg teedannuitiesmoreexpensive lessprofitable Moreequitybasedannuities Weakerlongevityguarantees WatsonWyattPartners2002 EffectofLTCrideronincome BeforeLTCclaim AfterLTCclaim Theproductisavariableannuitypriortoclaim thenafixedLTCannuityafterclaim plusacontinuingvariableannuity whichcouldconverttoaconventionalannuity Thelevelofbenefitischosenbythei