Phoenix Share Discussion Threads

[this_is_me] 22/1/2021 11:03

You should also note that 'flu' vaccines have been becoming less effective over the last 15 years. There is a theory that this is because the 'flu' virus is becoming adapted to the eggs that it is grown in as part of the production process.

[aleman] 22/1/2021 10:29

I agree with that. There are excess deaths in the pipeline from lack of current treatments. There are also excess deaths in the pipeline from the economic austerity that is to come as a result of the economic and tax effects that restrictions and lockdown cause in future - fewer expensive drugs and kidney dialysis machines, etc. . I actually suspect the future health effects of current restrictions are likely to be bigger than Covid in the end, and have not been given enough weight in recent decision-making, expecially as it will hit younger people more. In summary, we've had a double spike from Covid. I expect there to be a short term reduction over the next year or two (from some deaths of very old brought forward several months) and then I expect a decade or more of modestly higher death rates from a financially weakened NHS. This is hard to determine. It could be from next to nothing to quite significant. (And, to be fair, there might be some slight benefit if higher uptake of vaccinations in future reduce such as flu deaths.)

This study estimated 130k extra premature deaths due to the last recession (which might be a small part of the rising annual death totals trend seen since 2011, mainly due to ageing baby boomer numbers). The current recession looks set to have a bigger financial effect. Then add on excess deaths already being caused by major NHS disruption and patients avoiding hospitals. A figure of 300k premature deaths, some of them younger, seems possible. That is only half a year's deaths, though, over maybe a decade, so likely to affect PHNX but probably not greatly so.

[this_is_me] 22/1/2021 09:57

Aleman there is also the excess deaths in prospect, and already happening, due to the lack of treatment of cancer and also heart disease, diabetes etc.

[edmundshaw] 22/1/2021 09:32

Benefits of excess deaths would be small anyway, barely material in my estimates. I am not planning to make any changes to my investments because of them.

[lauders] 20/1/2021 11:46

Looks like a good appointment:

[aleman] 18/1/2021 16:59

Here's some comments on how assessing excess deaths is not straightforward. Note how EuroMOMO has a baseline that slowly rises to allow for the ageing population. If the line were flat, it would overstate excess deaths in the latest year. That's what comparing against a flat 5-year (or even 10-year) average does.



More comments here:



Comparisons to other measures of excess deaths in England

The Office for National Statistics also publishes a weekly report on excess deaths in England & Wales. The numbers reported by ONS are broadly in line with the overall excess death figures in this report but there are some differences as the ‘expected’ numbers in this report are not just the simple five-year average for 2015 to 2019, as used by ONS. As explained in the Methods, they are instead modelled estimates which adjust for factors such as the ageing of the population and the underlying trend in mortality rates from year to year.

EuroMOMO is a European mortality monitoring programme that aims to measure excess deaths related to seasonal influenza and other public health threats that uses a standardised methodology across 24 European countries. The methodology used by EuroMOMO is similar to that used by the PHE model, however, the EuroMOMO model looks at deaths by date of occurrence, and the PHE model looks at deaths by date of registration. Because there is a time lag between date of occurrence of death and date of registration, analysis of excess deaths by date of occurrence requires a delay correction, the reliability of which improves over time. These two models produce very similar results but with small differences due to the delay correction applied by EuroMOMO.



The PHE Daily GRO mortality model is used in PHE’s COVID-19 surveillance report for all-cause mortality. It uses a 5-year average to estimate expected deaths, similar to that used by the ONS but with a trend included. It looks at deaths by date of occurrence based on rapidly reported deaths from the General Register Office and uses a registration delay correction, the reliability of which improves over time. Overall, the excess deaths are similar in the COVID-19 surveillance report and this report, but may show some differences in specific weeks due to use of occurrence date compared with registration date, and in recent weeks due to the delay corrections.

To my mind it is better not to correct for delay but actually wait and use the right figures! You can pull up excess deaths by both date of registration and occurrence in the following link if you click on the regional and local figures. It's a bigger difference than you might think, eg. London is 9640 excess deaths by registration date but 7541 by date of death. I'm curious how it gets so big over a whole year when you'd expect it to be small over such a timeframe. Both these numbers are against 5-year averages so would be lower against a trended baseline/actuarial projection by maybe 30%?



As with all statistics, assume it's wrong and then try to work out why it's wrong and by how much.

As mentioned earlier, this year's positive excess could well be followed by a negative figure next year or two. I expect the balance of the two will be the important figure for PHNX - but how big will that balance be and for which numbers? I'm not assuming automatically that PHNX will benefit from Covid. It could be that more people take vaccinations in future and life expectancy increases. Who knows?

[aleman] 18/1/2021 13:30

I can't really comment on a report without knowing what assumptions they've used, but it sounds like they wanted headlines. The data needed to make such claims is not available yet. It has to be riddled with assumptions that others might not make.

[williamcooper104] 18/1/2021 13:26

Good points Another big unknown is the long term effects of long covid

[fenners66] 18/1/2021 12:08

From an article in the DM

"The UK study is based on calculations of excess mortality, which is a figure for how many deaths are occurring above what is expected for the time of year from historical trends.

It focuses on data spanning from March 2 to November 20 2020 and recorded 57,419 excess deaths, 15 per cent up on the expected figure, had Covid not struck. "

"The UK has recorded more than 86,000 COvid-related fatalities. "

So 37.5 weeks
or 1528 a week

But my 5000 a week above was intended as current since the death for covid figures were averaging over 1200 a day (down to 1119 at the moment, but could still rise again) and as these stats state they are before the current surge.

So I was trying to calculate a current weekly figure rather than the total.
I take the point that in months/years to come we may see the deaths decline as these are only pulled forward.

I note also the same DM article referring to UK life expectancy declining by about a year so I guess that will have to be built into actuarial models.

Aside from the number of deaths are the thoughts on funds using older gilts and the subsequent value gains on those gilts (if they were to be sold) reasonable or will they have already been replaced?
I do understand that any shorter dated gilts from say 10 years ago etc will already be gone.

[aleman] 18/1/2021 11:21

fenners66
18 Jan '21 - 00:17 - 4294 of 4297

Anyone run the rule over my annuity release musings yet ?

I suspect your excess death figures will be incorrect. Media-reported numbers are over-simplifed and not the same as ones used by actuaries. They need a lot of adjusting.

Actuaries project increasing deaths year-on-year due to immigration and ageing WWII baby boomers which mean the over 65s demographic has been growing over 2% per year since about 2011, and rising dementia deaths (now number 1 cause) which has been countering falling mortality rates. Media keep publishing excess deaths against the 5 or 10-year average but that does not reflect Covid excesses unless the demographic is flat. It isn't, so figures in media do not reflect actuarial trends. The annual deaths trend was increasing about 6-10k per year before Covid. I suppose you could knock 18-30k off the excess above 5-year average to get excess above trend but that assumes the trend continues smoothly which it might not. Then there are other issues under the surface that have to be addressed.

2020 excess death figures by date of death were running below those by date of report by about 20k a couple of months ago. (No idea why. Big carry over of deaths yet to report for year-end 2019 maybe?) Also, actuaries will not know the longer term excess until they see how big the negative excess is after the virus spikes. (How many deaths were just pulled forward a few months?).

So 80k+ deaths above the 5-year average might be only 60k above trend and only 40k above actuarial trend reported correctly by date of death. If some deaths are just pulled forward a few months, a 40k above trend 2020 figure could then be eroded by below trend 2021 figures. So how big is the Covid and total excess against recent actuarial projections and how big will they be when we look back in a few years? Don't know!

Actuaries need to work their way through the distortions in reporting deaths and trends in other factors that cause deaths to tease out the trends used to calculate financial products. It will be a while yet - probably several months to get the correct total deaths by date of death and then a few years to decide if the previously projected longer term trend to measure any excesses from it has changed or not. They will still be messing about with projections from 2019 data and monthly changes in trends for individual causes as they get slower but more detailed data. The early annual deaths figure for 2020 by date of report is probably too crude to be very informative for them, though they will be able to make some inferences from early Covid months where deaths by date will be accurate enough now. They will still need to be cautious of varying reporting of deaths as Covid progressed and changes in treatments that improved survival rates. Projections will emphasis the better survival rates of late - but those figures will only come more sharply into focus in months to come.

I don't think we have data to work out even a crude guess, yet. Yes, there will be short-term fluctuations now, based on actual claims, but will they reverse next year and come back on trend? What are other causes doing and how will they behave when Covid distortions are gone, or greatly reduced? Again - don't know!

[jonwig] 18/1/2021 09:00

If I see anything flagged up, I'll post it.
FY results early March will have something to say.

[fenners66] 18/1/2021 08:57

cheers jonwig

I was basing my ideas on older annuities as we are aware that the excess deaths are mostly the elderly i.e. already collecting their pensions.
Likely pre pension freedom so also likely to be drawing annuity.

I believe for these people there will be far less exposure to life insurance as the large sums involved in younger years become very expensive to insure when older.

[jonwig] 18/1/2021 07:02

fenners - sorry, I saw it and decided it was too hard, and flunked!

A quick look says that L&G has the biggest share of the UK individual annuity market with 17% (2019) but that doesn't include bulk annuities maybe?

Annuities written 10 years ago balanced gilt returns prevailing then, those written today balance today's yields. Excess deaths based on the former will give greater windfall gains to Phoenix than those from the latter (higher yields then) - I think!

[fenners66] 18/1/2021 00:17

Anyone run the rule over my annuity release musings yet ?

[cwa1] 17/1/2021 17:00

Interestingly, one paper I read at the weekend mentioned that insurers were under pressure on Friday(due to the Supreme Court ruling) and, according to it, one of the worst affected(in terms of price drop) in that group was, yes, you guessed it, Phoenix! Wonder how much business interruption insurance PHNX has written :-)

[soi] 17/1/2021 15:52

HI

I cannot offer a view on why the drop in PHNX share price albeit stocks generally seemed to be struggling much of the day.

I got back in lower than my 727 sell price and with some adds hold more than twice my prior holding.

Poor initial entry @ 706, then added down to 691.

This a mix of share buys and SB ( spread bet ) longs. More so on the latter.

I do not think I would add any more share buys, SB longs maybe a bit more.

GL All

[boonkoh] 17/1/2021 10:32

Potential customer scandal for ReAssure, reported by Which who have made an official complaint to the regulator.hxxps://www.which.co.uk/news/2021/01/vulnerable-reassure-investors-left-waiting-months-for-funds-after-lg-takeover/?utm_campaign=whichmoney&utm_medium=social&utm_source=twitter&utm_content=regulatebuynowpaylater_150121&utm_term=twnews

[jonwig] 15/1/2021 15:31

mrf - there are some companies which generate oodles of cash but no organic growth. They pay out the cash and raise new equity if they want to grow by acquisition. Their share prices are determined by a simple calculation of discounted cashflows PLUS market sentiment.

Phoenix is one such; utilities, infrastructure funds, renewable energy funds, even insurance companies are like this. So ask yourself, why should investing in an offshore wind farm have anything to do with Brexit? Why should investing in Phoenix have anything to do with Brexit? There are no factors which impact.

An investor should not lament the political situation and complain. He should ask, given the situation, how can I best make money or avoid losing money from circumstances which are above my control.

Moaning never made money!

[rimau1] 15/1/2021 15:20

Top up time here for me. I generally add in the 6’s and reduce in the 7’s which has worked well. The directors also time share purchases well at PHNX which will also trigger a top up. Core long term holding for me.

[williamcooper104] 15/1/2021 13:39

If only there was a way of posting excel models - as that's an interesting question worthy of a little number crunching

[fenners66] 15/1/2021 13:37

BBC said the other day mortality or excess deaths highest at any time since the 1920's

[fenners66] 15/1/2021 13:35

Assuming 5000 excess deaths a week
of pensioners say on £10k a year from annuity.
Built at a time of higher interest rates, say 5%.
So requires a fund of £200k
Means 5000x 200k releases every week
So £1bn a week
What is Phoenix share of the annuity market ?
15% ?
That would mean a release of £150m a week ?

But what are those gilts worth now ?
Does the business model keep the original gilts to fund the annuity
as a long term protected source of income or do they roll over as the
capital value rises (with falling interest rates)

10 year yield now about 0.29% does that mean that the original gilts
(if still held, I know say 30 year gilts with some time left to run)
are worth17x as much?

Could that mean the release is now 17x £150m a week?
So £2.55Bln ?


Discuss......

[eeza] 15/1/2021 13:30

You said you bought yesterday @ 711.
Post 4268.

[my retirement fund] 15/1/2021 13:20

Eye-watering 7% dividend, falling shareprice, prospects boosted by corona deaths, continued lowly rating in the face of near record global indices. Discuss....