The reinsurance company Swiss Re recently published a comprehensive report that highlights the risks many societies face as a result of ageing populations and increased life expectancies.
According the Swiss Re, underestimating life expectancy by just 1 year can add 5 percent to a pension plan's liabilities.
The report indicates that there are $17 trillion in global pension plan assets exposed to longevity risk.
High level recommendations include:
- Ensuring adequate awareness of and reserving for longevity risk by pension plan sponsors.
- Enhancing longevity risk transfer capacity in the insurance and reinsurance industry.
- Policy and regulatory modifications that realistically account for ageing populations.
- Development of capitla market solutions that address longevity risk.
Source: Swiss Re
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