Scenario modeling
\sɪˈnɛrioʊ\ \moʊˈdeɪlɪŋ\
A risk management technique applied to longevity risk where the outcomes of accessible, descriptive scenarios are modeled to assess their overall impact on future longevity and knock-on effects to pension plan or insurer liabilities.
Scenarios are often a more accessible way of visualizing possible future effects of longevity risk and can also be a useful way to apply a longevity stress test to a pension plan’s or insurers liability funding. Club Vita has developed a number of longevity scenarios ranging from what would happen if we developed a ‘cure’ for cancer through to possible effects of climate change.
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