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While many countries in Latin America use US-based data for their actuarial tables, a project between private pension and life insurance federation FenaPrevi and the University of Rio de Janeiro will change this for Brazil and may provide a model for other countries.
The project aims to build mortality tables that better reflect Brazilian demographics and provide more accurate pricing for life and annuity providers, federation president Antonio Cássio dos Santos told BNamericas
"We're in the second year and are expecting by the beginning of 2009 to have the research from the university and an agreement with the regulators," said Cássio, who is also CEO of the Brazilian unit of Mapfre Seguros.
Although collecting the initial data and building models is important, ensuring data management systems are in place to collect new data and maintain its quality over time will be the other test of the project, he said.
This will be important as Brazil and other countries with strong economic growth in the region may see their demographics change more rapidly than already developed countries.
For example, women in Brazil saw life expectancy at birth jump to 71 in 1995-2000 compared to 55 in 1955-1960, while women in the US saw these numbers increase to 79 from 73 for these same two periods, according to data from the UN Population Division.
This also provides an opportunity for other insurers and regulators in the region given the possibility of sharing best practice on such a project.
"Certainly this will happen since [when working with a university], there is the view you can help other federations and markets in applying a very modern approach to actuarial tables," Cássio said.
Total group and individual life premiums in Brazil hit 4.63bn reais (US$2.11bn) in the January-August period, up 9.89% on the same time last year, according to regulator Susep.