STEP 01
Define the relevant horizons
Match economies, inflation measures, interest rate indicators and forecast periods to the decisions the committee is making.
A CONSENSUS USE CASE
Long-term obligations deserve transparent assumptions.
Insurers and pension schemes balance long-dated commitments with investment strategy and risk management. Independently surveyed economic expectations can help their investment, finance, risk and actuarial teams challenge assumptions about inflation, interest rates and growth. The forecasts are external reference inputs, not a yield curve, actuarial valuation, solvency calculation or investment recommendation.
THE QUESTION
“How do we challenge the economic assumptions behind long-term assets and liabilities?”
Insurance & Pension FundsCONSENSUS ECONOMICS
FORECASTS RELEVANT TO YOUR WORK
Economic forecasts for insurers and pension funds
Match the information to your decision, then choose an appropriate publication or data format.
01 / FORECASTS
Inflation, growth and interest rate expectations at specified available horizons.
02 / EVIDENCE
Independent survey dates, forecast revisions and contributor disagreement.
03 / PRACTICAL OUTPUT
A funding or investment assumptions challenge pack, separate from actuarial models.
04 / ACCESS
Publications and historical Excel data, including longer-term series for covered markets.
The examples below use illustrative figures. Available data and usage rights depend on the service.
01 / THE SITUATION
Here’s the decision.
The assumptions review
A pension investment team is reviewing assumptions for its funding and asset allocation discussion.
The investment advisers expect a different inflation path from the finance team. Trustees want to know whether those assumptions are unusually optimistic relative to professional economists, how the outside view has changed and which differences warrant sensitivity analysis. Asset and liability models still require their own market data, actuarial methods and governance.
THE OBJECTIVE
Prepare a traceable macroeconomic assumptions comparison for the committee without substituting survey forecasts for actuarial or regulatory judgements.
02 / THE WORKFLOWChallenging long-term assumptions
Challenging long-term assumptions
for funding and risk decisions.
Match the investment or liability assumptions to comparable independent forecast vintages, review disagreement and sensitivity, then record the institution’s own actuarial and risk judgements separately.
STEP 02
Compare the reference outlook
Set the internal economic assumptions beside the latest comparable professional consensus and available ranges.
STEP 03
Explore changes and sensitivities
Use historical revisions and disagreement to identify the important inflation, rate or growth assumptions to challenge.
STEP 04
Document the decision
Record the survey vintage, limitations, modelling owner, sensitivity results and reasons for any retained house view.
03 / A PRACTICAL EXAMPLEA worked example.
A worked example.
The numbers in context.
Which long-term assumptions need a stronger challenge?
A pension investment team compares internal economic assumptions with a matched external survey. The figures below are illustrative, not actual survey results.
WORKING EXAMPLEIllustrative example
Swipe sideways to view the complete example table
| Annualised assumption | Internal planning view | Professional benchmark |
|---|---|---|
| Inflation | 2.80% | 2.45% |
| GDP growth | 1.55% | 1.90% |
| Policy interest rate | 3.15% | 3.40% |
THE PRACTICAL DELIVERABLE
Committee memo showing internal assumptions, dated outside benchmarks, sensitivities and approval responsibilities.
SUITABLE STARTING POINTReview historical forecast data
Independent economic forecasts and historical survey records for covered markets.
These example values are illustrative, not survey data. Explore an actual sample forecast publication
GO FURTHER / APPLY THE FULL DISTRIBUTION
The range behind
The range behind
the average.
Use professional inflation expectations to challenge a long-term planning baseline. Forecast dispersion is disagreement, not the probability of a funding outcome. “pp” means percentage points.
FORECAST DISTRIBUTIONIllustrative annual inflation expectations, one matched economy and horizon
Consensus mean2.50%
Low1.60%
High3.50%
Standard deviation0.42 pp
BEHIND THE AVERAGE
Two illustrative individual inflation estimates of 2.00% and 3.10% show how professional opinion can vary around the mean without defining pension funding scenarios.
LOW · 1.60%HIGH · 3.50%
Consensus mean Selected individual forecasts
A PRACTICAL SCENARIO OR RESEARCH TEST
Illustrative exampleTurn an inflation assumption gap into a committee review
Swipe sideways to review the scenario table
| Review lens | Illustrative external reference | Question for the team |
|---|---|---|
| Baseline comparison | 2.50% inflation | Why does the internal funding model use a different assumption? |
| Lower inflation sensitivity | 1.60% survey low | Which assets and indexed liabilities would be affected if inflation were lower? |
| Higher inflation sensitivity | 3.50% survey high | What would a coherent higher-inflation model sensitivity require? |
All figures are synthetic. The low/high estimates are from an imagined forecast panel, not confidence limits or internally coherent scenarios. Discount rates, indexation, liability cash flows and actuarial valuation methodology must be determined separately.
OTHER APPLICATIONS FOR THIS AUDIENCE
Further applications.
Pension funding discussions
Challenge the economic assumptions used in funding projections and scheme strategy.
USE THE DATA
Match relevant inflation and growth series to the committee horizon.
OUTPUT
An assumptions challenge and sensitivity register.
Insurance investment planning
Place internal inflation and rate views alongside surveyed expectations.
USE THE DATA
Review vintages and disagreements before running institution-specific asset-liability analysis.
OUTPUT
An investment assumptions memo with source dates.
Risk and governance review
Explain when and why a macroeconomic assumption changed.
USE THE DATA
Document survey vintages, overrides, owners and model limits.
OUTPUT
A reproducible external-reference evidence pack.
04 / WHAT YOU TAKE AWAYA practical result.
A practical result.
Ready to review.
Build an output that can be explained, challenged and updated as forecasts change.
How the consensus is calculatedEXAMPLE DELIVERABLE↗
Illustrative insurance and pensions deliverableA long-term assumptions challenge pack
A committee-ready comparison of internal macroeconomic assumptions with dated professional expectations and explicitly separated model judgements.
WHAT IT CONTAINS
Adapt the example to your own data and decision process.✓Inflation, growth and interest rate assumptions by horizon
✓External reference, vintage, range and revision history
✓Funding or investment sensitivities and approval record
05 / THE CONSENSUS ADVANTAGEWhy the data
Why the data
matter here.
Match the forecast inputs to the decision. The average, the distribution and the historical record serve different purposes.
RELEVANT FORECAST INPUTS
01
Inflation and GDP forecasts for relevant economies
02
Interest rate forecasts and historical changes where covered
03
Longer-horizon expectations and individual ranges where available
WHY CONSENSUS ECONOMICS
A documented external challenge to the house outlook.
Survey forecasts can contextualise inflation, rates and growth assumptions at specified horizons. Historical releases show when the professional view changed and individual estimates help identify disagreement. They do not supply pension discount curves, mortality assumptions, liability valuations or insurer solvency outputs.
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