Demand for Longevity Risk Picks-up with Lower Volatility
Demand for longevity risk has been returning to the UK pension market.
High levels of volatility during the financial crisis deterred many players in the pension buyout market.
The return to normalcy in the capital markets may, in fact, be contributing to under-pricing of longevity risk among those who are providing solutions to UK pension plan sponsors who seek to offload longevity-related liabilities.
A worthwhile article in the Financial Times discusses the range of options that are currently available to UK pension plan sponsors:
- Bulk Annuity
- Buy-Out
- Buy-In
- Longevity Swap
Source: Financial Times
