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Resilience in a time of crisis: how COVID-19 pandemic insights are supporting a vibrant longevity risk transfer market

Published online by Cambridge University Press:  10 August 2023

Amy Kessler
Amy Kessler*
Affiliation:
International Reinsurance Strategic Initiatives, Prudential Financial, Inc., Newark, USA
*
Corresponding author. E-mail: amy.kessler@prudential.com
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Abstract

Pension risk transfer and longevity risk transfer are now growing secular trends. From North America to Europe, companies are de-risking pension plans in near-record volumes and have continued to boldly do so throughout the pandemic—at or near the most favorable pricing experienced in years. The arrival of funded reinsurance on both sides of the Atlantic is bringing reinsurer capital and private assets to support the steady growth in the pension risk transfer market. Additionally, we have observed that the enduring low-rate environment and quest for uncorrelated risk has the world's largest investors directing billions into life reinsurance sidecars. How have these markets thrived during the worst global outbreak in a century? Key research on the pandemic's impact on pensioner life expectancy allowed prices to be set and transactions to proceed through a time of significant uncertainty.

Keywords

Longevity riskpandemicrisk transfer
Type
Research Paper
Information
Journal of Demographic Economics , Volume 89 , Special Issue 3: International Longevity Risk and Capital Markets Solutions , September 2023 , pp. 313 - 327
Copyright
Copyright © Université catholique de Louvain 2023

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References

Blake, D. (2018) Longevity: a new asset class. Journal of Asset Management 19, 278–300.CrossRefGoogle Scholar
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Cairns, A. J. G., Blake, D., Kessler, A. R. and Kessler, M. (2020) The Impact of COVID-19 on Future Higher-Age Mortality, Pensions Institute Discussion Paper PI-2007, May. http://www.pensions-institute.org/uncategorized/discussion-paper-wp2007/.CrossRefGoogle Scholar