Dealers tempt capital markets with longevity risk transfer evolution

Life swap


It is easy to see why dealers might be excited about the longevity risk transfer market. Estimates put the current total global amount of annuity- and pensions-related longevity risk exposure somewhere between $15 trillion (£9 trillion) and $25 trillion. Furthermore, an extension of life expectancy by a single year will add about 3–4% to the present value of a typical defined benefit pension fund’s liabilities, or $450 billion to $1 trillion to total exposures, according to the International Mon

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