Rising prices hammer seniors on fixed incomes
Long before workers at the San Diego Food Bank began distributing cardboard food cartons from the back of a truck on a recent day, elderly men and women formed a line in a church parking lot. The free food amounts to a lifeline for these seniors, who have seen inflation wring much of the value out of their fixed incomes. Nursing home expenses are spiraling, as is the cost of long-term care insurance. Dawn Helwig, an actuary at Milliman, a consulting firm, says the cost of premiums for new long-term care policies with inflation coverage has jumped by 30% to 40% since 2001, compared with an overall inflation rate of 23.7% in that time.
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Annuities get hung up on "what ifs"
The big crisis facing those nearing retirement these days is the fear that their savings won't last until they pass on. A new study by NAVA, the Washington, D.C.-based variable-annuity trade group, and Milliman, a Seattle-based consulting firm, claims that by using a combination of an immediate annuity and a relatively aggressive mutual fund, even people of moderate means can have it all: secure income for life and a bequest for their heirs.
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The nuts and bolts of consumer driven health can be difficult to master, still it's the concepts behind the strategy that keep many benefits professionals at arms length. A new study by Milliman, in partnership with the National Business Group on Health, profiles consumer driven health plans by revealing who enrolls and what savings the plans yield.
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Humberto Cruz: Annuity can pay off for your heirs
Do you want to spend the most you can in retirement? Or would you rather pass something on to your kids? Maybe you can do both. One way, according to the actuarial firm Milliman Inc. in Seattle, is to include an immediate fixed income annuity in your retirement portfolio. Although the finding is counterintuitive, including such an annuity increases on average the amount retirees can pass on to our heirs compared to putting all their money in a portfolio of mutual funds, a study by Milliman indicates.
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Market conditions right for fixed annuities
Market turmoil and rising interest rates might kick off a new season for the fixed annuity as the product emerges from the shadow of its variable cousin, an industry expert said. "If you look analytically at market conditions, you find the variable annuity has a bit of difficulty heading into an uncertain market, even with long-term guarantees," said Noel Abkemeier, consulting actuary and principal at Milliman Inc., a Seattle-based research firm. "Strange things are happening, and if interest rates pick up, it can strengthen fixed-rate and equity-indexed annuities."
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Actuarial firm Milliman Inc. reports that companies are moving toward a more bond-based strategy. The percentage of pension-plan assets invested in stocks dropped from 60 percent to 55 percent during 2007, representing a shift of almost $60 billion worth of plan assets from equities into fixed-income and other investments, according to the firm's study.
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Taxpayers may face hurricane tab
As hurricane season begins, Democrats in Congress want to nationalize a chunk of the insurance business that covers major storm-damage claims. Even some analysts hired by lobbyists for the federal program acknowledge it has its risks. "If you charge something less than the private-market cost for homeowners' insurance, that creates a potential incentive to increase exposure on the coast," said David Chernick of Milliman Inc. (Subscription required.)
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Shifting health costs pinch family budgets
Even as the growth of total spending on medical care slows, an analysis from the actuaries at Milliman shows the bite on household budgets keeps getting bigger. The cost of medical services, including health insurance premiums, for an average family in an employer-sponsored health plan will hit $15,609 this year, up $1,109, or 7.6% from 2007.
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Market turmoil has taken a toll on big pension funds
Reporting on Milliman's "2008 Pension Funding Study," The New York Times said that America's biggest pension funds lost ground in the first quarter and are likely to require larger contributions from their corporate sponsors this year. At the same time, though, some of America's biggest companies have begun taking steps to shield their pension funds from market volatility by moving out of stocks.
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Most VA carriers offer guaranteed living benefit
Researchers at Seattle-based Milliman, an actuarial and consulting firm, report that life insurers typically offer some kind of guaranteed living benefit with most of the variable annuity contracts sold in the United States these days.
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Milliman Principal and Consulting Actuary Raji Bhagavatula was honored as one of Business Insurance's "Women to Watch" in 2007. The 50 women so honored are chosen for outstanding work in commercial insurance, risk management, employee benefits, and related fields.
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Milliman: Family health increase stays in single digits
Researchers at Milliman Inc., Seattle, an actuarial firm, say the typical U.S. family of four will spend $14,500 on medical care this year, up 8.4% from the total for 2006.
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Firms shift more medical costs to workers
Employers are continuing to shift more health care expenses to their employees, according to a report released by Milliman today. The average total medical spending for a typical American family of four under a PPO health plan reached $14,500 in 2007, an increase of $1,118 over last year.
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