Helping ensure that living longer stays a financially secure experience

Swiss Re is at the forefront of a call by the insurance industry for increased awareness of the funding challenges generated by increased life expectancy

A position paper on Longevity compiled by the nine (re)insurance companies spearheading this year’s CRO Forum Emerging Risk Initiative says that while living a longer life is a significant achievement for society, it does present real challenges in ensuring that everyone has an adequate income throughout their old age.

A collective solution is the only sensible way to address the issue, the paper says, one involving individuals, employers, insurers and government stakeholders.

Life insurers have an important role to play in providing indemnity solutions for longevity risk, it adds. However, their current capacity to take longevity risk onto their balance sheets may be inadequate. A solution could be to develop products that transfer longevity risk to the capital markets.

The authors of the report emphasize that all longevity risk stakeholders will benefit from a sharper awareness of the challenges posed. Access to reliable demographic data to help model and quantify the risk will also be important as will regulations that promote a rigorous risk-based capital framework for both insurers and defined benefit pension funds.

Download Longevity: CRObriefing - Emerging Risks Initiative

Published 24 November 2010

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