OREANDA-NEWS. September 29, 2015. Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE:AON), has urged schemes and insurance providers to consider the mortality projection model published today by the Continuous Mortality Investigation (CMI), based on the latest ONS (Organisation for National Statistics) deaths data, with caution and remain focused on the longer term trends.

ONS data show that 2015 has been an exceptionally heavy year for mortality so far, with over 25,000 more deaths than the 300,000 expected in England and Wales over the first seven months of the year.  A significant number of these additional deaths may be due to last winter's ‘flu vaccine’ being less effective than usual, but mortality has also been heavier than expected for the remainder of the year.

Pension schemes and insurance companies use longevity (life expectancy) projections to place a value on their liabilities, and insurance companies also use them to set annuity prices.

However, Aon Hewitt believes that this data needs to be treated carefully and encourages schemes not to place too much weight on recent movements in mortality rates when setting assumptions for the long term future.

Martin Lowes, partner at Aon Hewitt, said:
“Longevity projections are key for the future planning for both pension schemes and insurance companies. However, they should not allow their projections to over-react to annual changes in the numbers of deaths as these may be caused by one-off factors rather than being part of a long term trend. Since 1995, the trend has been remarkably consistent until recently and therefore we would caution against a knee-jerk reaction based on just seven months of new data.

“ONS data has shown that mortality figures in 2012, 2013 and 2014 were also heavier than expected based on the improvement trend over the previous 20 years, and it is reasonable to take account of this – but we urge schemes to think carefully about how much weight to place on these more recent changes as against the previous long-term trend.”

Martin Lowes continued:
"Life expectancy is still increasing, just perhaps not quite so rapidly as before. We will need to see what happens to mortality rates over the next few years to help us judge the extent of this slowdown."

ENDS

Notes to Editors

About Aon
Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 69,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative risk and people solutions. For further information on our capabilities and to learn how we empower results for clients, please visit: http://aon.mediaroom.com/

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Media Contact
For further information please contact:

Colin Mayes                                          Marina Jane Sanchez
Aon Hewitt                                            CNC
01372 733689                                        020 3219 8811
colin.mayes@aonhewitt.com                  marina.jane-sanchez@cnc-communications.com