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Longevity Insurance: A Missing Market

Author

Listed:
  • ADAM CREIGHTON

    (School of Economics, University of New South Wales, Sydney 2052, Australia)

  • HENRY HONGBO JIN

    (School of Economics, University of New South Wales, Sydney 2052, Australia)

  • JOHN PIGGOTT

    (School of Economics, University of New South Wales, Sydney 2052, Australia)

  • EMILIANO A. VALDEZ

    (School of Actuarial Studies, University of New South Wales, Sydney 2052, Australia)

Abstract

More than half of the world's old live in Asia, and around 35% in India and China alone. As demographic transition proceeds regionally and globally, the development of a robust and reliable longevity insurance market will become essential. Although the need for such insurance is most pressing in Asia, longevity risk is poorly managed practically everywhere. This paper reviews theory and practice relating to longevity risk and insurance, amid a rapidly changing demographic and policy landscape. It analyzes the reasons for the failure of longevity insurance markets, and examines possible innovations in both markets and public policy that may lead to a more vibrant market and a greater variety of longevity insurance products. These include risk sharing between the buyer and seller, "deductibles", reverse mortgages, and securitization.

Suggested Citation

  • Adam Creighton & Henry Hongbo Jin & John Piggott & Emiliano A. Valdez, 2005. "Longevity Insurance: A Missing Market," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 50(spec0), pages 417-435.
    • Handle: RePEc:wsi:serxxx:v:50:y:2005:i:spec0:n:s0217590805002128
    DOI: 10.1142/S0217590805002128
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    References listed on IDEAS

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    Cited by:

    1. Moshe A. Milevsky & Thomas S. Salisbury, 2013. "Optimal Retirement Tontines for the 21st Century: With Reference to Mortality Derivatives in 1693," Papers 1307.2824, arXiv.org.
    2. Wills, Samuel & Sherris, Michael, 2010. "Securitization, structuring and pricing of longevity risk," Insurance: Mathematics and Economics, Elsevier, vol. 46(1), pages 173-185, February.

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