When once in a century happens twice in 13 years

Are you tempted to dismiss 2020 experience data for your current assumption development work?  Be careful!  Let's look back to this century’s FIRST once in a century event, the Global Financial Crisis of 2007-8, and see how things turned out after that.

Ruark 2010 studies
Surrender rates fell by about half during the crisis and have not returned to prior levels.  The prevailing opinion is that policyholders curtailed financial activities in favor of watchfulness.  A combination of low interest rates and product de-risking means that fewer attractive alternatives are available.

Ruark 2011 studies
The reduction in surrender rates during the crisis has evolved into flatter subsequent rates.  The in-the-money effect, as owners have higher persistency when they perceive more value in annuity guarantees, is still strongly evident, with convincing evidence for a different regime now versus prior to the crisis.

Ruark 2012-13 presentations
Dynamic moneyness relationships have not been stable through the recent crisis -- in fact, sensitivities have increased.  For many years, policyholder behavior risks were not a major concern, until they were.  Here are a few biggies from the public disclosures…

2011:  CAD 300m
2012:  USD 300m
2012:  EUR 600m
2012:  USD 1,100m

What is your company doing to understand and manage policyholder behavior risks?  Do you put as much into this as for management of capital markets risks?  Would you say that you are ahead of the pack?  Would you like to be?  What might this look like?

Ruark 2020-21 studies and presentations
ANOTHER once in a century event, for product risks that are highly sensitive to market crises?!  Yikes.  Dismiss 2020-21 data at your peril.

So don't miss out on our 2021 VA policyholder behavior studies which are on schedule for completion by June 30, with data through year-end 2020.  Please contact me if you have not already submitted your order form.  And triennial VA mortality study is on the way in the fall, and 2021 FIA studies are still fresh since February.

Still not enough?
Thanks to Tamiko Toland and the good folks at CANNEX for including me in their interview series here.  Full video, brief clips, and Q&A document.




Discussion slides: 2021 fixed indexed annuity industry studies

If you were not able to join our call on March 18, here are the discussion slides.  The theme is "bounded rationality" -- evidence of FIA policyholder decision-making that is sometimes logical and efficient, and other times not so much.  Which I can relate to -- this would have been a video except I forgot to click "record".

New regime or huge blip? Get in by Feb 15!

As we have talked with many clients over the last few weeks about 2020 annuity policyholder behavior changes, three important questions have emerged:

     1. Did these changes persist through year-end?

     2. Should this be interpreted as a new behavioral regime or a huge blip?

     3. How should this be reflected in annual assumption reviews for stat and GAAP?

We are here to help you answer! Get your order forms in for 2021 FIA and VA studies by February 15 for lower pricing if you have not done so already, including VA mortality study and analysis of COVID-19 impact.

In case you missed it, check out the video and notes of our 2020 study results and this article to help you get internal approvals. (Hint: make a business case instead of asking for budget dollars).

Video: highlights of 2020 variable annuity industry studies

If you were not able to join our call on January 21, here is a video of the presentation and discussion, and notes are available here.  For lower pricing, get those order forms in for 2021 studies by February 15 (June ETA, with data thru full-year 2020).


How to make the case for buying the data you need

In October 2019, I was one of the speakers at session 134 of the SOA Annual Meeting -- How To Get Real Results in Policyholder Behavior Modeling.  There were several Qs in the Q&A, and one of them was such a killer that my glib attempted A missed the deeper point.  Hand raised again, then killer Q was rephrased.  Gulp.  This time I got the point.  I think that words came out and we eventually moved on, but I knew and the asker of the killer Q knew that I did not produce a worthy A.

This wrecked my day.

It gnawed at me for months.  And it got me thinking about what we do from a much broader perspective.  Whether you are a potential buyer or seller of data and data-based insights, you are in the data business, so you need to know how to make the pitch and close the deal for data.  Here is the A that the killer Q deserved.  I hope you find it helpful...

From the November 2020 Issue of The ActuaryDemonstrating the Value of Data

Sympathy for the Actuary: Improving your model of FIA GLIB income commencement

Discussion slides are available for download here:  Ruark - BAAC 20201022 - Sympathy for the Actuary

The next meeting of our Behavioral Analytics Advisory Council will be:

Sympathy for the Actuary: Improving your model of FIA GLIB income commencement
We will discuss problems for annuity companies and actuaries with traditional modeling approaches, limitations of using only own-company data, and most importantly, an approach that we have developed and are using with clients that can quantifiably improve your model and risk management. Good for your company and good for you.

We look forward to your constructive feedback and an interesting discussion. You might even find this valuable for continuing education credit.  Please contact me if you have not already received an invitation with access info.

Thursday October 22 at 2:00-3:00pm Eastern

Best regards,


2021 Behavioral Analytics Plans

To aid your planning and budgeting for the rest of this year and 2021, here is a 1-page summary of our plans.


Thanks to so many of you who shared your ideas and suggestions at our most recent Behavioral Analytics Advisory Council call in June and in other discussions this year. We expect that our plans for 2021 will meet your needs. The inclusion of FIA and VA experience data from the 2020 crisis, the mortality study, and the other changes noted are worth discussion, so please plan to join our next call.  Please contact me if you have not already received an invitation with access info.


VA folks -- friendly reminder that data collection is in progress for our 2020 VA studies, with data through Q2 2020, target completion in November. Don't miss your chance!


Thank you for your ongoing support. Please contact me with any questions.


Best regards,



T minus 7

Hello friends of Ruark,

7 days to go!

If you have not done so already, reminder to please return your order form to us by June 30 before heading off for summer vacation. Thanks in advance, as this will help us plan for a very busy next few months. (And VA clients, prices increase 25% after June 30). We all will soon learn a lot about crisis-behavior for recent vintage products, which should mean better experience studies and better modeling.

If you still need to make your case with the budget hawks or higher-ups:

Even for large blocks, relevant industry data in a credibility-based framework has a quantifiable and compelling cost-benefit. Here is a short case study demonstrating this for GLIB/GLWB income modeling for a company that has 35% market share. If you are not using the industry data this way, why not?

And here is an even shorter one in terms of hedge breakage. We have seen that relevant industry data can consistently improve A/E results by several percentage points, which can avoid $ millions of losses due to hedge breakage.

...Data is not a budget question, it is an enterprise risk management question. Please, for your sake, our sake, and that of the actuarial profession, do the math before you decide. Let us know if we can be of any further assistance as you do. If you can find something that has better bang for the buck, we would love to hear about it.

Thanks for your ongoing support, stay safe, and have a great summer!

Kind regards,




Online meeting May 20 - Highlights from 2020 FIA Industry Studies

Thanks to the many of you who joined this online meeting!

Discussion slides are here - Ruark BAAC 20200520 - 2020 FIA Industry Studies.


FIA folks, this one is for you.  (And yes, as shown above, GLIB income commencement is sensitive to moneyness).

We thank those of you who have already purchased our 2020 FIA industry studies of policyholder behavior. We have held online meetings with many others over the last couple months to share highlights from our 2020 FIA industry studies including our first-ever FIA mortality table. This meeting on May 20 was intended for those with whom we had not yet had a chance to meet (online). Please let me know if you would like to schedule a separate meeting to aid your purchase decisions.

Lots of data:

  • Total exposure years grew to 23 million, a 21% increase over last year's study
  • Double the exposure years for GLIB contracts past the end of the surrender charge period
  • GLIB exposure constituted 44% of exposure overall, and 49% of exposure in the last 12 study months
  • 39% increase in lifetime income withdrawals, to $5.4 billion
  • The study data comprised over 4 million policyholders from 17 participating companies spanning the 12-year period from 2007-2019, with $296 billion in account value as of the end of the period

Discussion slides are here - Ruark BAAC 20200520 - 2020 FIA Industry Studies.

Kind regards,


Timothy Paris, FSA, MAAA
Chief Executive Officer
Ruark Consulting, LLC
530 Hopmeadow Street
Simsbury, CT 06070
Mobile 860.866.7786
Email timothyparis@ruark.co
Website ruark.co
Connect with me and follow Ruark on LinkedIn®