Burgeoning deficits in pension programmes are driving the longevity swaps market.
Shrinking asset bases are also a key factor, according to Blaise Bourgeois, life chief risk officer at AXA Group.
"Innovative solutions such as longevity swaps provide for a capital market hedge against any further deviation in mortality improvements already factored into the reserves of long-term liability holders at times when the cost of an ageing population is becoming a critical issue for public and private sector fundings alike in many countries. This means that the longevity swaps market has a huge potential for growth," he says.
The comments appear in a special ILS intelligence report in the summer issue of Intelligent Insurer
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Pension deficits, longevity swaps market, AXA Group