WTW Launches Geospatial Mortality Model to Transform U.S. Pension Risk Transfer Pricing

Quick Summary

WTW has launched an upgraded Geospatial Mortality Model (GMM) specifically for the U.S. pension risk transfer market. By analyzing 200+ socioeconomic factors and four million life-years of data, the model helps insurers accurately price longevity risk and improve asset-liability management for pension portfolios.

How Does WTW Improve Pension Risk Transfer Pricing?

WTW solves the challenge of longevity risk management by integrating geographic insights with traditional pension data. This version of the Geospatial Mortality Model allows insurers to move beyond generic mortality tables, offering a granular risk assessment based on where participants live. By identifying lifestyle-driven longevity factors, PRT writers can sharpen their competitive pricing strategies.

• Four million life-years of mortality data used for training.
• Post-COVID experience data included through the end of 2024.
• 200+ socioeconomic factors evaluated to identify predictive health and wealth indicators.

What Data Powers the Geospatial Mortality Model?

The Geospatial Mortality Model leverages a massive dataset to provide enhanced predictive capabilities for the insurance community. By evaluating health-related factors alongside participant-specific pension information, the model identifies highly predictive trends in life expectancy that traditional models often miss. This level of detail is critical for mitigating unexpected outcomes in large-scale pension transfers.

Beth Ashmore, Senior Managing Director, Retirement, WTW, said: “We are thrilled to partner with our colleagues in Insurance Consulting and Technology to expand the reach of WTW’s Geospatial Mortality Model (GMM). GMM has already provided pension plan sponsors better insights into their plans’ unique longevity and we’re excited to bring this enhanced capability to the insurance market.”

How Does This Benefit U.S. Insurers and Reinsurers?

For the pension risk transfer market, accuracy is the primary driver of profitability. The GMM provides strategic pricing edges by allowing firms to strengthen asset-liability management through better visibility into future liabilities. This data-driven approach ensures that insurers can compete for mandates with greater actuarial confidence and reduced risk of capital shortfall.

Karen Grote, Managing Director and North American Life Division Leader, Insurance Consulting and Technology, WTW, said: “For insurers, accurate mortality assumptions are foundational to pricing and risk management. By making this proven model available to the insurance community, we’re giving PRT writers a powerful new way to sharpen pricing, enhance longevity risk management, and compete with greater confidence.”

FF NEWS TAKE:

This launch definitely moves the needle for the U.S. PRT market. As pension buy-outs and buy-ins reach record volumes, the ability to price longevity risk management with geospatial precision is a massive competitive advantage. WTW is effectively weaponizing socioeconomic data to provide the insurance industry with the most sophisticated mortality forecasting tool available today, likely forcing competitors to accelerate their own modeling upgrades.