Annuity News

Swiss Re is very good at highlighting the scale of longevity risk on a global basis and the challenges--financial and otherwise--that result from aging societies. A recent report from Swiss Re highlights the magnitude of the longevity risk challenge and calls for the development of a capital market to deal with the high hurdle of funding longer lives. Points from the report that highlight the scope of longevity risk include: The aggregate value of defined benefit pension liabilities on a global...

Research from the Center for Retirement Research at Boston College suggests that asset allocation is a relatively ineffective factor in creating a secure foundation of retirement income . The research examines and compares the effectiveness of a handful of levers that have the potential to contribute to a solid foundation of retirement income. Among the levers or contributing factors considered are: Asset Allocation Working Longer A Reverse Mortgage Spending Less The various retirement income...

An interesting piece in the New York Times discusses the possibility that the United States may never return to the rate of economic growth that existed for long periods of time before the recent recession. Demographics are considered as the source of this detachment from long-term growth trends. Specifically, slower growth is related to declining rates of growth in the work force, and lower employment growth is tied to slower population growth and fewer women entering the labor market. The low...

A recent article published in the Financial Analysts Journal examines the relationship between demographics and both economic growth and capital market returns. The authors—Robert Arnott and Denis Chaves—use a new econometric technique to confirm a strong link between demographic trends and: excess (in excess of returns on domestic cash) stock market returns; excess bond market returns, and; real per capita gross domestic product (GDP). Ten year forecasts for GDP growth, bond market...