The New Life Market

Authors

  • David Blake,

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    • David Blake is Professor of Pension Economics and Director of the Pensions Institute, Cass Business School. Andrew Cairns is Professor of Financial Mathematics at the Department of Actuarial Mathematics and Statistics, Heriot-Watt University. Guy Coughlan is a member of the management team at Pacific Global Advisors. Kevin Dowd is Professor of Finance and Economics, Durham Business School. Richard MacMinn is Edmondson-Miller Professor in Insurance and Financial Services at Katie School, Illinois State University. The authors can be contacted via email: A.J.G.Cairns@hw.ac.uk, Guy.Coughlan@PacificGA.com, Kevin.Dowd@hotmail.co.uk, and Richard.Macminn@ilstu.edu
  • Andrew Cairns,

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    • David Blake is Professor of Pension Economics and Director of the Pensions Institute, Cass Business School. Andrew Cairns is Professor of Financial Mathematics at the Department of Actuarial Mathematics and Statistics, Heriot-Watt University. Guy Coughlan is a member of the management team at Pacific Global Advisors. Kevin Dowd is Professor of Finance and Economics, Durham Business School. Richard MacMinn is Edmondson-Miller Professor in Insurance and Financial Services at Katie School, Illinois State University. The authors can be contacted via email: A.J.G.Cairns@hw.ac.uk, Guy.Coughlan@PacificGA.com, Kevin.Dowd@hotmail.co.uk, and Richard.Macminn@ilstu.edu
  • Guy Coughlan,

    Search for more papers by this author
    • David Blake is Professor of Pension Economics and Director of the Pensions Institute, Cass Business School. Andrew Cairns is Professor of Financial Mathematics at the Department of Actuarial Mathematics and Statistics, Heriot-Watt University. Guy Coughlan is a member of the management team at Pacific Global Advisors. Kevin Dowd is Professor of Finance and Economics, Durham Business School. Richard MacMinn is Edmondson-Miller Professor in Insurance and Financial Services at Katie School, Illinois State University. The authors can be contacted via email: A.J.G.Cairns@hw.ac.uk, Guy.Coughlan@PacificGA.com, Kevin.Dowd@hotmail.co.uk, and Richard.Macminn@ilstu.edu
  • Kevin Dowd,

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    • David Blake is Professor of Pension Economics and Director of the Pensions Institute, Cass Business School. Andrew Cairns is Professor of Financial Mathematics at the Department of Actuarial Mathematics and Statistics, Heriot-Watt University. Guy Coughlan is a member of the management team at Pacific Global Advisors. Kevin Dowd is Professor of Finance and Economics, Durham Business School. Richard MacMinn is Edmondson-Miller Professor in Insurance and Financial Services at Katie School, Illinois State University. The authors can be contacted via email: A.J.G.Cairns@hw.ac.uk, Guy.Coughlan@PacificGA.com, Kevin.Dowd@hotmail.co.uk, and Richard.Macminn@ilstu.edu
  • Richard MacMinn

    Search for more papers by this author
    • David Blake is Professor of Pension Economics and Director of the Pensions Institute, Cass Business School. Andrew Cairns is Professor of Financial Mathematics at the Department of Actuarial Mathematics and Statistics, Heriot-Watt University. Guy Coughlan is a member of the management team at Pacific Global Advisors. Kevin Dowd is Professor of Finance and Economics, Durham Business School. Richard MacMinn is Edmondson-Miller Professor in Insurance and Financial Services at Katie School, Illinois State University. The authors can be contacted via email: A.J.G.Cairns@hw.ac.uk, Guy.Coughlan@PacificGA.com, Kevin.Dowd@hotmail.co.uk, and Richard.Macminn@ilstu.edu

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ABSTRACT

The huge economic significance of longevity risk for corporations, governments, and individuals has begun to be recognized and quantified. By virtue of its size and prevalence, longevity risk is the most significant life-related risk exposure in financial terms and poses a potential threat to the whole system of retirement income provision. This article reviews the birth and development of the Life Market, the new market related to the transfer of longevity and mortality risks. We note that the emergence of a traded market in longevity-linked capital market instruments could act as a catalyst to help facilitate the development of annuity markets both in the developed and the developing world and protect the long-term viability of retirement income provision globally.

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