A secure and long-term longevity protection product provides individuals with a happier and more fulfilling retirement, knowing financial security is in place for life. Driven by the ageing society around the world, the global pension risk transfer (PRT) market has been growing, reaching $52 billion premiums in 2022.

The best estimate prediction of life expectancies is essential to ensure (re)insurers and PRT providers can meet their obligations to pay these annuities for the lifetime of the policyholders. However, predicting future longevity is not an easy task, even for experienced professionals, as so many factors, both century-old and evolving, need to be taken into consideration.

In the past 100+ years, mortality trends have been steadily improving, driven by various favorable factors, including improved medical diagnosis, advancement in treatments, improved access to healthcare, healthier lifestyles, etc.

Then came 2020. COVID-19 led to a global scale pandemic, causing nearly 15 million excess deaths worldwide in 2020 and 2021, resulting in the decline of global period life expectancy by 1.6 years between 2019 and 2020, according to the Global Burden of Disease. The global pandemic stopped the ever-improving mortality trajectory and left a massive dent in the curve.

How should the life and health insurance industry interpret this incident to the future mortality prediction? This article discusses the basic principles of longevity pricing, the impact of COVID-19 on the longevity curve, and how to adapt to this unusual disruption in order to reflect more realistic assumptions in the future.