Defined terms for the annuity market and lifetime income landscape.
Mutual insurance is the commercial insurance form in which the insurer is owned by its policyholders rather than outside shareholders, with policyholders sharing in surplus and bearing operating losses, regulated as a standard insurance carrier rather than as a mutual aid or fraternal society.
A Nash equilibrium, in the cooperative context, is a configuration of participation decisions in which no individual could improve their outcome by unilaterally changing whether they join, remain in, or exit a pool, given what every other participant has decided to do.
Natural hedging is the practice of offsetting longevity-related exposures within a single portfolio by combining liabilities that respond in opposite directions to changes in life expectancy — typically life insurance and annuities — so that systematic mortality shifts partially cancel.
Pool governance is the set of rules, decision rights, and structural features that determine how a lifetime income pool operates — underwriting standards, redistribution rules, withdrawal rights, and dispute resolution — independent of any individual member.
Pool size effects are the ways in which the income, predictability, and operating costs of a lifetime income pool change as the number of members in the pool increases or decreases.
