With a new calculation method, pension funds and insurers can estimate an individual’s life expectancy. The new method, based on postcodes, has been developed by Aon Hewitt and the consultancy firm has agreed on the use of the method with Dutch regulator De Nederlandsche Bank.

Life expectancies can vary within cities and even within streets and people from better neighborhoods often have a longer life expectancy, because they live healthier. With their postcode it is now possible to map where the people with a higher life expectancy live.

“In postcode areas where life expectancy is low, the mortality risk can be up to 40 per cent higher than the national average. If members of a pension fund live a year longer, they need to save four per cent more,” Frank Driessen, chief actuary at Aon Hewitt, said.

The method is already in use for pension funds in the UK and also in the Netherlands for marketing purposes, loans and in the insurance business.

Aon Hewitt will use an enormous database to calculate the life expectancy of people with different social economic backgrounds. The difference can be as big as seven years and depend on lifestyle, but also environmental factors such as housing, pollution and road safety.

Driessen added: “For pension funds and insurers an average life expectancy of a Dutch man or woman is not enough.”

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