Longevity

Demand for longevity risk has been returning to the UK pension market. High levels of volatility during the financial crisis deterred many players in the pension buyout market. The return to normalcy in the capital markets may, in fact, be contributing to under-pricing of longevity risk among those who are providing solutions to UK pension plan sponsors who seek to offload longevity-related liabilities. A worthwhile article in the Financial Times discusses the range of options that are...

The Reinsurer Swiss Re has provided the first public-private longevity transaction with a U.K.-based public sector pension fund . Swiss Re is essentially providing longevity insurance to 11,000 of the current pensioners under the Royal County of Berkshire Pension Fund. Swiss Re will assume the "floating" annuity payments and longevity risk for the 11,000 pensioners in exchange for an ongoing fixed premium. The Royal County of Berkshire retains control over the plan assets and the plan...

The United Kingdom has what is arguably the most sophisticated market in the world for financing longevity risk . The market for pension buyouts is developing and the demand among pension sponsors to off-load longevity risk is srtong. The issue is that there is a relative lack of capacity or ability to meet the demand. Reinsurers are active in the buyout market but the capacity is limited, and the longevity derivatives markets are relatively illiquid when compared to more established...

The Centers for Disease Control and Prevention reports that: The number of obese adults in the United States has more than doubled in the past 25 years. The number of obese adults in the U.S. now totals 34 percent of the population or 72 million people. Obesity related medical costs totaled $147 billion in 2008. Obesity accounts for 5 - 15 percent of deaths in the U.S. Meanwhile, smoking is related to 18 percent of deaths. As a result, researchers are starting to see the adverse effects of the...