Recently, the Chinese Association of Actuaries.
It was issued to various insurance companies.
Chinese Life Insurance Industry Experience Life Table (2023).
(Draft for Solicitation of Comments).
The industry is about to usher in the fourth set of life tables.
After the new version of the fee rate is used.
It will have a big impact on the pricing of life insurance.
This article must be read carefully.
There are two major changes to the life table
The data is adjusted to the end of 2023.
And not the current third edition of 2013.
The Greater Bay Area version has been added.
The national version of the mortality rate has dropped.
The decline was even greater in the Greater Bay Area.
The reduction in mortality has been significant
The average is around 20%.
The highest is more than 50%.
The life table used for fixed life and whole life insurance is:
Non-pension business is a table for men and women.
Take this table as an example.
2023 compared to 2013.
Up to 10 years old.
The mortality rate has dropped by about 50 per cent.
Under 55 years of age.
The mortality rate has dropped by more than 20 per cent.
The Greater Bay Area version has a lower mortality rate than the national version.
Under 55 years of age.
The Greater Bay Area is more than 15% lower than the national version.
Through the comparison of the two versions of the life table.
We can know.
The pure risk premium of life insurance will drop significantly.
How much will it drop?
Read on.
Life insurance products** will drop dramatically
Life insurance will be more affordable in the future
Let's do a test.
The products used include:
10-year life expectancy.
20-year life expectancy.
Guaranteed to 60 years old.
Guaranteed to 80 years old.
and whole life insurance.
Let's assume that the assessment rate is 3%.
The 2023 version for men is better than the 2013 version
The 10-year and 20-year periods saw the largest decline.
The insured age is under 35 years old.
The reduction can be more than 20%.
10-year product.
The insurance age is less than 7 years old.
It can be reduced by 40%.
The highest is even more than 50%.
Whole life insurance has had limited declines.
It's around 5%.
The 2023 version for women is better than the 2013 version
10-year, 20-year.
and the largest drop in 60 years old.
The applicant must be under the age of 55.
The reduction can be more than 20%.
The Greater Bay Area is larger than the whole country
The Greater Bay Area saw the largest decline.
Take men, for example.
The Greater Bay Area has lower rates than the national version.
Under 40 years of age.
10-year, 20-year.
It is more than 20% lower than the national version.
As a result, the decline in the GBA is lower than in 2013.
Take men, for example.
10-year, 20-year decline.
Generally above 30%.
Summary
After the rate schedule is revised.
Mortality has dropped dramatically.
Life insurance products** will be lower.
Term life insurance saw the largest decline.
The Greater Bay Area is even more low-lying.
However, the rate consists of three parts.
Pure risk premium, expense ratio and return on investment are determined.
In the future. Mortality rate has decreased.
The expense ratio will go down.
The return on investment will also decrease.
The first two reduce premiums.
The latter may increase the premium.
In the future, it may not be possible to use 3% pricing.
If the pricing rate is lowered.
Rates will be corresponding**.
Hence the final rate reduction.
It doesn't have to be as big as this article describes.
on pension insurance.
How does it affect both insurances.
Please see the follow-up sharing.