Defined terms for the annuity market and lifetime income landscape.
Total return is the combined result of income and capital appreciation on an investment over a specified period, expressed as a single figure that captures every source of return the investment produced.
A transfer-backed claim is a lifetime income claim in which the income is funded by an entity other than an insurance company's general account — typically a government program backed by taxing authority or an employer plan backed by plan assets and sponsor obligations.
Underwriting in the longevity context is the process by which an issuer of a lifetime income arrangement assesses each prospective participant's expected longevity through age, sex, health status, family history, and other factors, and assigns the participant to a priced risk class.
Value at risk is a summary risk measure that states the loss a portfolio would not exceed over a specified time horizon at a specified confidence level, typically expressed as a dollar amount or a percentage of portfolio value.
