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Longevity Risk Analytics

LITE Longevity Risk Analytics LITE Longevity Risk Analytics (LITE LRA) is a support tool that gives guidance to the likely mortality outcome of each case under management and was built to increase your capabilities as a longevity based asset manager. LITE LRA provides “new” information that can lead to improved cash management and realization of higher ROI’s while easily integrating into risk mitigation processes already in place. LITE LRA also adds valuable information to further assess policy and portfolio sensitivities, likely performance, premium durations and many other aspects of your portfolio analysis framework.

LRA provides the manager with “new” information that may lead to improved Cash Management and realization of higher ROI’s.

- Roger K. Annin, FSA, MAAA, FIA; Lewis & Ellis Actuaries and Consultants.

Informational Advantage Longevity Risk Analytics (LRA) provides its users with an informational market advantage by assessing probable LE deteriorations that, when known in advance, create a favorable offset in the equilibrium of buyer/ seller information. The ability to sell a policy that will most likely fall on the tail end of its survival curve while buyers are pricing at the median, creates an opportunity to capitalize on the incorrect assessment of value.

Longevity Insight Services 858.246.7703

Life expectancy is a key factor in determining the market value of a policy, however ROI is largely dependent upon cash flows and the actual mortality date. The gap between LE and the actual date of death can span several years and mean the difference between substantial profit and catastrophic loss.

Closing the Gap Psychological and social factors play a major role in how long a person lives despite their age, sex and medical condition. Factors such as conscientiousness, neuroticism, social networks, socioeconomic status and personality have a tremendous impact on how we as humans live our lives, cope with stress and respond to challenges; all contributing to mortality. LITE LRA was designed for the purpose of narrowing the gap between expected mortality (LE) and the actual date of death by underwriting additional mortality risk factors that are left out of the traditional underwriting process.

Assessing this gap and employing the data from LITE LRA across sensitivity data already considered, gives the manager the ability to evaluate individual assets that are likely to result in prolonged premium obligations that could have a negative effect on cash management, ROI’s and net asset value over time. Additionally, LITE LRA adds value to the manager by providing insight into a rebalancing strategy that may be needed to achieve the desired return or optimize returns and increase net asset value.


Research and analysis of the LITE approach support the value of this tool in assessing individual longevity. Research indicates that the psychological factors assessed by LITE, relating to personality and individual traits, are statistically predictive of longevity trends and can be used to better segment risks within a mortality distribution. Further, the impact of various psychological factors on potential longevity trends is of such significance as to be material on the valuation of longevity products or structures. As such, LITE forms a complementary tool for adjusting mortality assumptions and models derived from traditional medical risk factors such as age, gender and medical impairments.


- Roger K. Annin, FSA, MAAA, FIA; Lewis & Ellis Actuaries and Consultants.

Another Tool for Your Arsenal LITE LRA could be a great addition to your arsenal of tools for balancing return on investment with cash management. In acquiring or divesting policies, LITE LRA can be a helpful asset for achieving a target ROI while limiting downside risk. There are many benefits from the implementation of LITE LRA into your management strategy and we would like to personally demonstrate how LITE LRA can add value to your business. However, in the interim, here are some of the other advantages our clients have found: 1. The ability for a portfolio to produce early maturities to fund longer duration risk is important. LITE LRA can add valuable information for re-balancing and positioning the portfolio to achieve the desired return or optimize returns. 2. Managers could identify policies likely to yield less than a minimum return based on probable extension of life. This approach is designed to help the manager combine probable LE adjustments with ROI impact for a better determination of each policy’s likely performance. 3. Not all policies are created equal, meaning that outliving life expectancy is much more significant for some policies than others, depending on the length of the LE, slope of the premium curve and sometimes policy provisions. The categorization feature of LITE LRA flags policies that may need deeper sensitivity analysis or may be strong candidates to be sold or lapsed because of the magnitude of impact they are likely to have on the portfolio. 4. Policies with heavy cash demand and a high LITE Score could be sold for present market value to relieve stress on the portfolio and mitigate duration risks. 6. LRA qualifies mortality assumptions by predicting the extension or deterioration of life expectancy, aiding in the identification of candidates for action, based on probable future changes in life expectancy. Arbitrage can be captured as the market value of a “red flagged� policy will typically be higher than the present value of its true future cash flows. All data gathered and produced by LITE is the confidential information of the client also provides an edge.

Longevity Insight Services 858.246.7703

7. Some polices have provisions that are important, assuming the insured reaches a certain age, but if that likelihood is small, the benefit of the provision could evaporate which may have an impact on the true value of that policy to the portfolio.

LRA Dashboard The LITE LRA Dashboard centralizes all of the predictive data gathered by LITE in a complementary, easy to use, interactive management center to further maximize your capabilities as an asset manager. The features of the LITE LRA platform include, risk segmentation, single policy ratings, aggregate analysis, risk ordering and many other unique categorization features that can be very useful when assessing the value of a portfolio and its projected performance.

LRA Risk Ordering and Categorization LITE LRA acts as a qualifier for determination of longevity relative to life expectancy estimates obtained via traditional medical underwriting. LITE helps to identify candidates for action based on the likely mortality outcome of each policy and its relative risk in the portfolio. A manager can thereby use the data provided by LITE in its portfolio analysis framework, to further assess sensitivities throughout the portfolio and identify candidates that may be introduced into the marketplace as a strategy to redistribute risk and lower portfolio sensitivity.

Allow us to give you a private tour through the system by calling or emailing to the information provided below. We will schedule a time at your convenience and walk you through an interactive product demonstration where we will answer any and all of your questions. Thank you for your time, we are looking forward to hearing from you.


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Longevity Risk Analytics

Longevity Insight Services’ LITE analysis provides longevity estimates by applying proprietary methods, systems and resources to information supplied by insureds and client companies. Longevity estimates are estimates only and Longevity Insight Services does not represent that an insured will die on or near a projected date. Copyright 2012 Longevity Insight Services. All Rights Reserved


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