Managing Financial Risk of Longevity

• Autorzy: Jan K. Solarz

Warianty tytułu

Zarządzanie ryzykiem długowieczności

• Języki publikacji: EN

Abstrakty

EN

The financial implications of people living longer than expected (so-called longevity risk) are very large. There are different implications for individuals, for households, for insurers, for local and central governments. Longevity is public goods for local and central government. Longevity is merit goods for insurers. Longevity is club goods for households. Longevity is private goods for individuals. Addressing longevity risk requires a multi-pronged policy approach. First, governments, local and central, should acknowledge the significance of longevity risk. Second, this risk should be appropriately shared between individuals, households, insurers and the government. Third, financial risk of longevity should be transferred to those that are better able to manage it. Moreover, longevity risk is a long-tailed risk. However, there is a limit to the number of capital market participants that are willing to provide long-term risk transfer solutions. In the paper there are highlighted a number of instruments for management financial risk of longevity. All participants in management financial risk of longevity need to: -- acknowledge their exposure to longevity risk, -- put in place methods for better risk sharing between governments, insurers, households and individuals, -- promote financial innovations for the transfer of longevity risk, -- provide better information on longevity and better education on old age finance. In sum, better recognition and mitigation of longevity risk should be undertaken now, including thorough risk sharing between individuals, households, insurers and government through the development of a liquid longevity risk transfer market. Longevity risk is already on the doorstep and effectively addressing it will be the more difficult, the longer remedial action is delayed.(original abstract)

Finansowe następstwa braku profesjonalnego zarządzania ryzykiem długowieczności są znaczne. Fakt, że ludzie masowo mylą się o 3-5 lat we własnych ocenach długości swego życia, ma duże znaczenie dla bliskich, gospodarstwa domowego, dla ubezpieczycieli, lokalnych i centralnych władz. Długowieczność rozpatrywana jako dobro publiczne, dobro użyteczności publicznej, dobro klubowe oraz dobro prywatne pokazuje nową twarz tego złożonego zjawiska demograficznego. Redukcja negatywnych następstw urzeczywistniania się ryzyka długowieczności będzie tym trudniejsza, im dłużej będziemy zwlekać z uznaniem istnienia tego typu ryzyka.(abstrakt oryginalny)

Słowa kluczowe

EN

Risk management; Life expectancy

PL

Zarządzanie ryzykiem; Długość życia

• Czasopismo: Europa Regionum
• Rocznik: 2017
• Tom: 30
• Strony: 33--47

Twórcy

autor

Jan K. Solarz

• Społeczna Akademia Nauk, Wydział Nauk o Zarządzaniu i Bezpieczeństwie

Bibliografia

• Barr, N.A. (2002). Reforming pensions: myths, truths, and policy choices. London: LSE Research.
• Better solutions for an ageing population (2015). London: The Longevity Science Panel.
• Bohn, H. (2009). Intergenerational Risk Sharing and Fiscal Policy. Journal of Monetary Economics, 56, 805-816.
• Bojar, W. (2015). Przeciętne dalsze trwanie życia w Polsce I jego determinant. Acta Universitattis Lodzensis, Folia oeconomica, 315 (4).
• Booth, H., Tickle, L. (2008). Mortality Modeling and Forecasting: A Review of Methods. AAS, 3 (1), 3-43.
• Cocco, J.F., Gomes, F.J. (2011). Longevity Risk, Retirement Savings, and Financial Innovation. CEPR.
• Cummins, N. (2014). Longevity and the Rise of the West: Life spans of the European Elite, 800-1800. The London School of Economics and Political Sciences Economic History Working Paper 209.
• Global Financial Stability Report: The Quest for Lasting Stability, ch. 4. The financial impact of longevity risk (2012). Washington DC:IMF.
• Groome, T., Blancher, N., Ramlogan, P., Khadarina, O. (2006). Population Ageing, The Structure of Financial Markets and Policy Implications. Washington DC: IMF.
• Kirkwood, T. (2015). Why and How people Are Living Longer? Newcastle University Institute for Ageing.
• Kostroch, D., Ugazio, G. (2016). Beauty is in the eve of the beholder: Leveraging disaggregated macroeconomic data. European Central Bank Conference, Frankfurt am Main.
• Milevsky, M., Huang, H. (2011). Spending Retirement on Planet Vulcan: The Impact of Longevity Risk Aversion on Optimal Withdrawal Rates. Risk Management, 23 (1), 24-38.
• O'Brien, C., Fenn, P., Diacon, S. (2005). How long do people expect to live? Results and Implications. Centre for Risk and Insurance Studies Research Report, 1.
• Obersteadt, A. (2013). Managing longevity risk. Center for Insurance policy and research newsletter, April.
• Peters, F., Nusselder, W., Macenbach, J. (2012). The longevity risk of the Dutch Actuarial Association's projection model. Network for Studies on Pension, Aging and Retirement Paper, 11.
• Recent Trends in Life Expectancy at Older Ages (2015). London: Public Health.
• Richards, S., Jones, G. (2004). Financial aspects of longevity risk. London.
• Roy, A. (2012). Innovative Approaches to Managing Longevity Risk in Asia: Lessons from the West. ADBI Working Paper, 353.
• Steinmann, L., Scotti, V. (2007). Annuities: Private Solution to Longevity Risk. European Paper on the New Welfare, 8, 115-121.
• Tan, K.S., Blake, D., MacMinn, R. (2015). Longevity Risk and Capital Markets. Mathematics and Economics, 1.
• Tomorrow's World: The Future of Ageing in the UK (2016). ILC-UK.
• Visco, I. (2006). Longevity risk and financial markets. SUERF.
• Williams, R. (2015). The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses. Washington DC: The National Academic Press.

Identyfikatory

DOI

10.18276/er.2017.30-03