Crystal ball (Image: Thinkstock)

U.S. reinsurance company executives have been trying to spend the past few days selling life insurance company executives on their forecasting powers.

The reinsurance company executives traveled to Las Vegas for the ReFocus 2019 conference, which started Sunday and ended Wednesday.

(Related: Life Re Giants Crowd Out Other Players: Moody’s)

The American Council of Life Insurers and the Society of Actuaries sponsor the annual conference series to give reinsurance company executives and life insurance company executives a chance to talk.

Reinsurance companies make deals that absorb mortality risk and longevity risk from life insurers. Reinsurers are the life insurers’ own insurers.

Many reinsurers also offer life insurers a wide variety of other services, such as policy administration services, and helping with assessing their books of business.

The top-level sponsors of the 2019 conference were Milliman, which is an actuarial consulting firm, and Bermuda International Long Term Insurers and Reinsurers (BILTIR)

The companies in the second sponsorship tier were Athene, Hannover Re and Reinsurance Group of America.

Here’s a sampling of what speakers at the conference talked about, drawn from the event website:

1. Insurtech

Many speakers talked about ways life insurers can use new and improved forms of technology, such as genetic analysis, to do a better job of managing their blocks of business.

Dror Katzav of Atidot, for example, said his company has tools that can inhale insurance company data, label and organize the data so that computers can use it, and spit out charts that show interesting information, such as which life insurance policyholders and annuity holders look as if they’re likely to let their policies or contracts lapse.

Jon Sabes of Life Epigenetics talked about ways to use information about life insurance insureds’ DNA methylation, or genetic markets, to improve longevity estimates. The company has a research pilot that will gather epigenetic data from 1,300 people, along with those people’s answers to standard life insurance underwriting questionnaires, their prescription data, and their attending physician statements. The company will use the data to see how epigenetic data can fit in with a real-world life insurance or annuity underwriting operations.

2. Opioid Use

In theory, life insurers, and their reinsurers, might see opioid use as a minor nuisance.

Observers might see life insurers as companies that tend to do business with higher income, healthier people, who are much less likely than people in the general population to have drug problems.

In reality, since the early 2000s, opioid-related mortality has quadrupled in the United States, 40% of the deaths come from use of prescription opioids, and life insurers see opioid-related deaths as a strong headwind, according to conference organizers.

The opioid-related mortality panel included representatives from both Munich Re and RGA.

For people in the top 15% of the U.S. population in terms of income, the death rate has increased much faster since 2010 than the death rate for people in the bottom 15% in terms of income, according to one slide in the panel’s slidedeck, which was based on an SOA analysis of federal government mortality data.

Heroin killed about 5 people per 100,000 lives in the high-income group in 2017, and about 3 people per 100,000 lives in the low-income group, according to  the slide.

Panelists said life insurers might be able to identify applicants with opioid use problems by looking at the results of lab tests and paying more attention to applications from tobacco users applying for relatively small amounts of coverage in states where opioid use is especially common.

3. Consumer Resistance

David Levenson, the president of LIMRA and LOMA, gave a presentation on U.S. consumers’ relatively low levels of life insurance ownership.

Levenson pointed that, according to consumer survey data, other financial concerns are getting more consumer attention than protecting against mortality risk.

About 66% of consumers surveyed said having money for a comfortable retirement is important, and 55% said having money to pay for long-term care expenses is important.

Just 37% of the consumers said burdening dependents if they die prematurely is an important concern.

About 29% of the consumers who don’t own life insurance said they lack life insurance because they just haven’t gotten around to buying it.

Resources

Information about the ReFocus 2019 conference, including links to some of the presentation slidedecks, is available here.

— Read Reinsurers Have Traded $60 Billion in Longevity Risk: Rating Agency, on ThinkAdvisor.

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