NETHERLANDS - Aon Hewitt Netherlands has developed a method that enables pension funds and insurers to predict longevity based on person's postcode.

The consultancy said postcode-based information would give pension funds the means to "better fine-tune their financial reserves to their future liabilities".

It added that it had reached an agreement with supervisor De Nederlandsche Bank to deploy its new technique.

According to Aon Hewitt, life expectancy can vary considerably within councils and even within streets, showing differences of as many as seven years.

Frank Driessen, chief actuary at Aon Hewitt Netherlands, said: "In postcode areas with a low life expectancy, the mortality rate can be up to 40% higher than the national average.

"If participants live one year longer than expected, pension saving needs to be increased by 4%."

Aon Hewitt said it sourced its information from a "large database" that enables the company to derive the likely longevity of people with differing social and economic backgrounds.

People who live healthy, do not smoke and practice sport have a better chance of living longer, while environmental aspects such as housing, pollution and traffic safety also play a role, according to the consultant.

In the Netherlands, postcodes are already being deployed in marketing, the granting of loans and car insurance.

But Pieter Omtzigt, MP for the Christian Democrat party CDA, said he was not keen on a differentiating between males and females for longevity forecasts.

"This might be useful for internal calculations, but not for risk selection," he said.

The MP said a postcode approach might set a precedent for other methods of risk selection.

He cited the ban of medical checks for surviving relatives' pensions, as well as the ban to differentiate between genders at the sale of life insurance.

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