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January 28, 2019 at 06:37 PM
Two actuaries said in New York that the life settlement community really needs its own set of mortality tables.
Corwin Zass, the strategic director of Actuarial Risk Management, and Don Solow, the president of Vista Life & Casualty Reinsurance Company, both talked about the need for life settlement mortality tables at a Life Insurance Settlement Association conference for institutional investors.
(Related: Life Settlement Portfolios Did Something Weird in 2018)
For life settlement investors, one frustration has been that life expectancy forecasting firms often come up with wildly different life expectancy forecasts.
John Welcom, the chief executive officer of Welcome Funds Inc., a life settlement brokerage firm, said his firm might ask several firms for life expectancy forecasts for the same insured and get back estimates ranging from 42 months to more than 130 months.
Zass that’s partly because accurately predicting the lifespan of one individual is impossible.
Under good conditions, a firm may be able to provide a reasonably accurate, precise forecast for a large group of insureds, but it will always have a hard time providing that level of precision for one individual, Zass said.
Solow also emphasized the difficulty of predicting the lifespan of a single individual.
