惠悦国际-定制年金产品咨询报告(3).ppt

Designingannuityproductsforconsumersneeds,PresentedbyMikeWadsworthPartner,WatsonWyattmike.wadsworthMay2003,Agenda,OptionsforgeneratinglifetimeincomeConsumerneedsInvestingforlifeManagingsurvivalAnewmodel,Idontwanttoachieveimmortalitythroughmywork-IwanttoachieveitbynotdyingWoodyAllen,Peoplewillsoonlivetwiceaslongastoday,andhavethepotentialtolivefor1200yearsJohnHarris,ScientistMemberofUKHumanGeneticsCommissionasreportedSundayTimes,25June2000,Funeralfirmhitby29%profitfallNotenoughpeoplearedyingintheUS,accordingtoServiceCorporationInternational,theworldslargestfuneralservicescompanyTimes,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,UnitsUnitPriceValueStartofYear10,00010.00100,000AnnuityPayments(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/minincomecalcd,Annuitantselectsincomebetweenmaxandmintonextreview,Paymentsdeductedaccordingtoannuitantrequirements/survivalcredits/investmentreturnsadded,Fundbalancedeterminedatreview,Max/minincometonextreviewcalcd,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,Othergteedannuitiesmoreexpensive/lessprofitable,Moreequitybasedannuities,Weakerlongevityguarantees,WatsonWyattPartners2002,EffectofLTCrideronincome,BeforeLTCclaim,AfterLTCclaim,Theproductisavariableannuitypriortoclaim,thenafixedLTCannuityafterclaim,plusacontinuingvariableannuity(whichcouldconverttoaconventionalannuity).Thelevelofbenefitischosenbythei