The majority of the report describes the development of medical underwriting in the market, whilst exploring ways in which it will continue to develop over the coming year.

MorganAsh’s experience shows that there are not only some key areas of evolution in the bulk annuity space, but a great deal of market development in the pension valuation space.

Here are some of the areas MorganAsh expects the medical underwriting to evolve in the immediate future:

  • Medical underwriting will be used not only for MUBA transactions but also for mortality valuations – so-called MUMS – (medically underwritten mortality studies).
  • Longevity modelling will evolve to include medical health data, combining the best of both disciplines, and within the consultants’ models not just within a few insurers.
  • Models will be created to predict when it is cost-effective to use medical data.
  • We will start to understand how much data is cost-effective to collect for the amount and proportion of liabilities for each member, and hence profile the data collection and underwriting approaches depending on these factors. These may range from collecting doctors’ reports for the higher liabilities, to telephone interviews, filling in simple online forms to simply data cleaning for the smaller liabilities. We expect the range of data-collection methods to evolve to match the liabilities.
  • We will start to understand how often we need to refresh the data. This will depend on its use and importance to understand the benefits this could have for triennial valuations or change of ownership with insurance via MUBA transactions. We will be working closely with our consultant partners to continue to evolve the market.

James Mullins, partner and head of buyout solutions at Hymans Robertson – and panellist at the launch of the report – said, “While at a macro level the medically underwritten bulk annuity market is becoming more standard, there is still lots of room for innovations and evolution, and we continue to work closely with MorganAsh to bring these benefits to schemes.”

Andrew Gething, managing director of MorganAsh, commented, “The use of medical data is transforming many industries, and the pensions industry will take a leap forward using evidence-based data to improve the precision in valuing schemes. We are humbled the CASS Business School report has recognised our small part in helping this market grow from inception. And we are looking forward to bringing further innovations to the market to continue its development.”

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