Question: What are the pros and cons of taking clients' postcodes into account when pricing annuities?

Andrew Gadd is head of research at the Lighthouse Group It has always been accepted and understood that annuity rates are affected by various factors including how long an individual is likely to live. In simple terms individuals who are likely to die younger are a good risk for insurers, but those whose payments will continue long into their old age are bad for business. The most obvious examples are impaired life annuities or the fact that smokers, with their reduced life expectancy, can receive substantially higher annuity rates. I can certainly understand why insurance companies are...