Longevity

Richard Thaler is a professor at the University of Chicago and he is a renown economist. Best known for his work in the area of behavioral finance , Thaler focuses on how human psychology affects economic decision making. Thaler recently wrote a piece on annuities which was published in the New York Times. The Times article focused on the annuity puzzle . The term annuity puzzle is used to describe the lack of annuity adoption (purchases) relative to what economists would consider rational...

A recent article in Bloomberg discusses the state of capital market solutions for the transfer of longevity risk . The reality is that the longevity market is still in its infancy and there are a number of obstacles that are affecting its development. One of the main hurdles involves the fact that longevity risk is very long-term in nature. Securities that mature over the course of 20 years are not hugely appealing to hedge fund managers who are providing quarterly performance reports to their...

Two health researchers delve into an eight decade longevity study conducted by a Stanford psychologist in the recently released book titled The Longevity Project . The Stanford longevity study follows 1,500 people over the course of their lives and chronicles each of those lives in great detail. The Longevity Project offers some findings that cut against the grain of conventional wisdom in the longevity field. An excerpt of the book ran in the New York Times recently and can be viewed by...

JP Morgan recently assumed 70 million pounds of longevity risk through a longevity swap that covers the lives of active members of a UK-based defined benefit pension plan . This is the first longevity swap that covers active pension plan participants. Previous deals have focused on retired pension plan members. The longevity swap is based on JP Morgan's LifeMetrics longevity index and it has a 10 year term. The index-based swap is reportedly a better vehicle for dealing with active pension plan...