Market insight from year-end 2020 SFCRs: Sample of life insurers based in Luxembourg
Gross written premiums in our sample of Luxembourg-based life insurers decreased 20% in 2020.
During April, 2020, average accounting discount rates decreased by 56 bps, while annuity purchase rates decreased by 51 bps. This caused the estimated retiree buyout cost as a percentage of accounting liability (Accumulated Benefit Obligation) to decrease from 105.7% to 105.5%.
When considering these results, please keep the following information in mind:
The Milliman Pension Buyout Index (MPBI) uses the FTSE Above Median AA Curve and annuity purchase composite interest rates from several insurance companies to estimate the cost, as a percentage of accounting liability, of transferring retiree pension obligations to an insurer. To review previous monthly findings, visit milliman.com/en/periodicals/Milliman-Pension-Buyout-Index.