The Daily Manila Shimbun


Mortality table revision seen lowering life insurance premiums 

April 1, 2017

TOKYO- The Institute of Actuaries of Japan on Friday announced a plan to revise the standard mortality table, raising the prospects for life insurance premium cuts as early as April next year.
The institute, made up mainly of life insurers, released a draft revision of the table that reflected an increase in longevity in the country. The revision is expected for April 2018, which would mark the first change to the table in 11 years.
In line with the revision, insurers will consider lowering life insurance premiums for policies signed in or after that month, industry people said.
Compared with the current table, mortality rates will fall 24 pct on average for men and 15 pct for women. The draft will be submitted to the Financial Services Agency in the near future.
Insurers calculate life insurance premiums by adding personnel costs and the results of their investments to the basic rates, which reflect the mortality table.
If policyholders live longer, they will pay premiums longer. This allows insurers to expect stronger earnings and expands the scope for cutting insurance premiums.
The margins of premium reductions will vary by insurance company but are likely to be around several pct.
Meanwhile, longer life expectancies tend to increase medical insurance benefit payments. But insurers are likely to be divided over whether to raise premiums for such products. (Jiji Press)