Welcome Michael Riley

We are pleased to welcome Michael Riley to Ruark's analytics team, as Data Engineer.

Michael comes to us from Conning, where he was VP for Information Systems. He has 20 years’ experience managing data warehouses, including past roles at MetLife, Citigroup and Travelers. Michael is a graduate of the University of Connecticut, a CPA, and a Certified Scrum Master.

Michael will be responsible for Ruark's data architecture and data management, including both production processes and ongoing development.

Good data is the foundation of strong data analytics. With Michael on the team, we look forward to continuing to serve the annuity industry with our experience studies, predictive analytics, assumption model recommendations, and consulting services.

To reach Michael directly, click here.

Living benefit riders boost persistency


Living benefit riders boost persistency

SIMSBURY, CT, March 5, 2018 – Ruark Consulting, LLC today released the results of its 2018 studies of fixed indexed annuity (FIA) policyholder behavior. The studies, which examine the factors driving surrender behavior and income utilization, were based on experience from 3.3 million policyholders spanning the period January, 2007 through September, 2017. A record 16 fixed indexed annuity writers participated, comprising $215 billion in account value as of September, 2017.

“Getting actuarial assumptions right can mean the difference between profitability and anti-selection, or between overhedging and underhedging,” said Timothy Paris, Ruark’s CEO. “Ruark’s studies use industry data to provide greater insight, and more predictable and stable results, than companies can achieve when they limit themselves to their own experience.”

Ruark’s FIA studies cover products both with and without a guaranteed living income benefit (GLIB). GLIB exposure outside the surrender charge period increased 82% in this edition over 2017.

Study highlights include:

  • Overall industry surrender rates have exhibited a secular downward trend since 2007. Surrenders at the shock duration (the year following the end of the contractually defined surrender charge period) have fallen from over 50% in 2007 to 15-25% in recent quarters, and surrender rates during the surrender charge period have fallen from high single digits to below 3%. We note an industrywide dip in surrenders in 2016 and rebound in 2017; it is likely that uncertainty surrounding the DOL’s proposed Fiduciary Rule and political factors encouraged a “wait-and-see” attitude among many policyholders and advisors.
  • The presence of a living benefit rider has a notable effect on surrender rates; contracts with a guaranteed living income benefit (GLIB) have much better persistency than those without. Surrender rates during the surrender charge period for contracts with GLIBs are less than half those of contracts without the guarantee. Among contracts that have begun taking income withdrawals, persistency is better still; shock duration rates are approximately 15%, as compared to 26% for contracts without GLIB.
  • Credited rates have a discernable effect on surrenders. As in past studies, we note that contracts earning less than 2% exhibit sharply higher surrenders than those earning more. Additional experience in this study reveals differentiation among contracts with higher returns, as well.
  • The in-the-money effect, by which owners have higher persistency when the account value is below the guarantee base, is subtle in the case of FIAs. We find that using an actuarial moneyness basis, which discounts guaranteed income for interest and mortality rates, has much greater predictive power than a nominal measure.
  • GLIB benefit commencement rates are low: 7% overall in the first contract duration and then falling to the 2% range in years 3-10. Notably, although experience is limited, exercise rates spike in year 11, suggesting that benefit bonuses may be effective at delaying exercise. When a living benefit contract does begin taking withdrawals, it is likely to continue in subsequent years; average continuation rates are near 100%. However, utilization of the benefit is far from fully efficient. A significant proportion withdraw income in excess of the contractual guarantee, which degrades value of the guarantee in future years.
  • Commencement rates vary considerably by age and by contract size. They are also influenced by the in-the-money effect. Exercise rates increase sharply when contracts move deep in the money, as policyholders recognize the economic value of the income guarantee.
  • FIA contracts typically offer the opportunity to take 10% of account value annually in penalty-free withdrawals, often following a 1-year waiting period. This is the case for contracts with and without a guaranteed living income benefit (GLIB) rider. Base contract withdrawals have been largely stable over the past decade. Behavior differs subtlely across four groups: Those taking the full penalty-free amount; those taking less; those taking excess; and those for which no penalty applies.
  • Free partial withdrawal activity on the base contract is influenced by age and required minimum distributions, as well as contract size. Notably, withdrawal sizes spike in the year following the end of the surrender charge period, when all partial withdrawals become penalty-free. Average withdrawal sizes jump 8 percentage points following the end of the surrender charge period.

Detailed study results, including company-level analytics, are available for purchase by participating companies. For further information, please contact Timothy Paris, CEO.
Contact Tim

Actuary Professional Code of Conduct

The Real Code

 Ruark Code of Conduct

As part of the continuing education that is required for me to maintain my US actuarial credentials, I typically spend about an hour each year meditating on the

Code of Professional Conduct.  Unlike most of the regulations, practice standards, guidance notes, memoranda, presentations, and work products with which we so often must grapple in our daily work, the Code is concise, easy to read, and vital.  And therein lies its power to clearly define what it means to be an actuary, and hence, what is not an actuary.

The Code has been effective since January 2001, replacing prior versions which dated back many years.  Yet like returning to the great literary classics, subsequent readings of the Code continue to offer new insights into timeless challenges, and received wisdom to apply to new challenges.  For this, actuaries, their clients and employers, and the public owe the committee of authors an enduring debt of gratitude.

With actuarial work increasingly reliant on, and sometimes competing against, computer-based algorithms, artificial intelligence, and myriad techy buzzwords (including at my own company!), I think that the Code is more valuable than ever.  But don’t take my word for it.  It’s only four pages -- read it for yourself.  Read it for your clients and employers.  Read it for the public.  Then ask yourself -- am I living up to this high standard of conduct?  Can algorithms, computers, or other merely math-savvy people replace this professionalism?

I used to read the Code with a rote objective of fulfilling my continuing education requirements.  Now I know better.  I read and reread it as the animating spirit of our profession, so that no matter what my work is, or what technological tools (dare I say computer code) and professional judgment I use to carry it out, I am ever mindful of the high standards I must maintain to be an actuary and the importance of my work to the greater good.

2018 Service Expansion and Enhancements

A year ago, we introduced new customized services in order to help our clients answer one simple but vital question:

How can we translate complex and dynamic experience data into coherent assumption models?

We all know why this is so important and essential for those responsible for new product pricing and competitiveness, quantification and management of inforce risks, and more predictable reserves, capital, and corporate financial performance. But how to do it is a very difficult question to answer using only traditional methods, even for us, with seriatim monthly data since 2007 covering approximately 70% of the US annuity market. Enter predictive analytics.

Combining these techniques with traditional methods in a collaborative and transparent process, we develop and help clients implement coherent assumption models that are based on relevant segments of industry data and tailored to each company’s product mix and situation, and that are flexible enough to accommodate the emergence of new data. These models include partial withdrawal and income utilization behavior under GLWB and similar longevity-based guarantees, with strong goodness of fit and predictive power. And the prudent use of industry data allows us to fill credibility gaps and provide metrics that demonstrate that these models are typically better than what individual companies can do using only their own data. This is why we are here.

We aim to be the platform and industry benchmark for principles-based insurance data analytics and risk management.

We encourage you to consider our services as customized investments in risk management. The benefits are quantifiable in terms of actual-to-expected ratios, product pricing, hedging efficiency, reserves, and capital.

Building on our strengths in the US annuity market, we are pleased to announce our plans to further expand and enhance our services in 2018:

  • Simplified pricing for variable and fixed indexed annuity experience studies of policyholder behavior, assumption models, and benchmarking. As always, our services will address the many factors of influence and their changes over time, including product and guarantee type, surrender charge period and duration, moneyness of guarantees on actuarial and nominal bases, contract size, tax status, age, gender, distribution channel and compensation structures, and income utilization and efficiency. This covers industry data and customized analysis for each client’s own data. Our industry data is more comprehensive than ever, as we have recently added several new clients totaling well over $100 billion in account value.
  • New mortality studies for both variable annuities and fixed indexed annuities, most recently completed in 2015 and 2016, respectively. This will include analysis relative to the Ruark Mortality Table for Variable Annuities, which we know many clients have adopted for assumption purposes.
  • As we remain committed to analytical excellence, useful delivery timing, and production speed in the services above, we aim to further automate our data gathering and scrubbing, shorten cycle times, and introduce new dashboard services that use clustering techniques to quickly benchmark and identify experience outliers for further investigation. This will not replace full-blown experience studies and related analytics, but would bring the whole endeavor much closer to real time, and improve our clients’ ability to take management actions earlier. These services will transcend product lines, and are part of our continued collaboration with the Goldenson Center for Actuarial Research at the University of Connecticut, a designated Center of Actuarial Excellence by the Society of Actuaries.
  • Begin gathering industry experience data for other products, such as traditional fixed deferred annuities, payout annuities, life insurance, and pensions, in the US and other jurisdictions. As these reach critical mass, we plan to offer similar studies and services as above.

2018 VA and FIA Behavioral Services

For each of:
VA Surrenders                       FIA Surrenders
VA Income Utilization          FIA Income Utilization
VA Mortality                          FIA Mortality
VA GMIB Annuitization
Standard Premium


Experience Studies – industry results in aggregate, along with your company results, in a detailed report with numerical exhibits covering key factors, cohorts, and dynamics
Customized assumption model – initially calibrated to industry results, and tailored to your company based on credibility techniques
Review of your current assumptions, and comparison to the customized model above
Benchmarking of your results relative to peers
Presentation and discussion with our team
Membership on our Behavioral Analytics Advisory Council

A busy September is coming up. Hope to see you in our travels...

Eric Halpern and Tim Paris will be moderating a few sessions at the SOA's first-ever Predictive Analytics Symposium, and we are delighted to be one of the corporate sponsors for this exciting event.

Tim Paris will be attending the BILTIR Life and Annuity Conference. Keynote speaker is a long-time favorite of our's and many...

Both events are still open for registration.

September 14 - 15, 2017

Swissotel Chicago
Chicago, IL

September 19, 2017



Organizational news at Ruark

Hi folks, a few quick updates so you are acquainted with who's doing what for you in our shop: * Sally Osit has taken on the new role of Chief Administrative Officer, responsible for centralized functions such as project management, IT, HR, and administration for Ruark's large block of annuity reinsurance treaties. * Eric Halpern has recently joined us as Chief Operating Officer, responsible for leading our consulting operations, with a primary focus on policyholder behavior analytics, including industry- and company-level experience studies, predictive modeling and assumption model development, and related client projects. The rest of our team is still here and as vital as ever, myself hopefully included. Congratulations to Sally and Eric in their new roles. We know that these changes will help us to more efficiently provide the excellent products and services that you have come to know and expect from us. Please feel free to contact any of us with questions. Tim