24 September 2012 Insurance

Insurers can’t cope with longevity risk alone

Capital markets will have to play a greater role in off-setting longevity risk, says a new report by Swiss Re.

The report, A mature market: Building a capital market for longevity risk, says that although insurers and reinsurers play a significant role in off-setting longevity risk, a liquid capital market of that risk will be essential in dealing with an ageing population.

Recent estimates suggest that the average pension fund scheme is underfunded by 24 percent and that defined benefit assets, which are exposed to longevity risk, total over $20 trillion globally. This demonstrates the need for more insurance industry capacity to off-set the risk.

"As the scale of the risk is so vast, capacity is unlikely to meet the future demand for longevity products without a capital market,” said Alison Martin, head of life & health Reinsurance at Swiss Re.


More on this story

Insurance
1 December 2023   Path to 1.1 looks orderly: European deals are 1/4 to 1/3 in FOTs, ahead of UK & US.
Insurance
29 November 2023   Protectionism is driving efficiencies from the economy, narrowing risk-sharing pots.
Insurance
22 November 2023   Fitch expects a significant recovery in earnings in ’23 and further improvements in 2024.

More on this story

Insurance
1 December 2023   Path to 1.1 looks orderly: European deals are 1/4 to 1/3 in FOTs, ahead of UK & US.
Insurance
29 November 2023   Protectionism is driving efficiencies from the economy, narrowing risk-sharing pots.
Insurance
22 November 2023   Fitch expects a significant recovery in earnings in ’23 and further improvements in 2024.

Intelligent Insurer
Newton Media Ltd
Kingfisher House
21-23 Elmfield Road
BR1 1LT
United Kingdom