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Posts feedHedging or betting?
Last week I presented at Longevity 14 in Amsterdam. A recurring topic at this conference series is index-based approaches to managing longevity risk. Indeed, this topic crops up so reliably, one could call it a hardy perennial.
Socio-economic differentials: convergence and divergence
Many western countries, including the UK, have recently experienced a slowdown in mortality improvements. This might lead to the conclusion that the age of increasing life expectancies is over. But is that the case for everyone?
How much data do you need?
There are two common scenarios when an actuary has to come up with a mortality basis for pensioners or annuitants.
Risk and models under Solvency II
Insurers need to have internal models for their major risks. Indeed, both the Individual Capital Assessment (ICA) regime in the UK and the pending Solvency II rules in the EU demand that insurers have good models for their risks.
Partial buy-outs
It is quite common for a pension scheme to want to reduce its risk, but to be unable to afford a full buy-out. The question is how best to reduce risk with the funds available, i.e. which liabilities to buy out first.
Measuring obesity
Obesity is a public-health concern throughout the developed world, since it is linked to a variety of chronic conditions such as diabetes.
Concentrate!
One of the challenges in modelling financial portfolios is the concentration of risk arising from the fact wealthier people will usually have significantly higher benefits than the less well-off.
Concentration of risk
Liabilities within any given portfolio are rarely equal, and they usually differ widely in size. Typically, a large proportion of liabilities is concentrated in a relatively small number of lives, so this should always be checked.