SCOR : Conference 2017 – Longevity Risk

More and more people are living to 65 and over, and for a long time this has fueled general concerns about associated financial issues. The thinking is that, at this age, people generally stop being net contributors and instead become net receivers of benefits. Moreover, people who live longer tend to see a deterioration in their health, which increases the global cost of care.

However, that vision is no longer completely true. Nowadays people tend to reach retirement age in better health and to be more active - they create companies, they continue to work, they consume. Unfortunately, this assessment is not true for all layers of the population, and varies deeply between countries. Governments and private institutions have to work together to tackle this issue. Governments should create incentives for people to save for retirement. The (re)insurance sector should adapt their products to the new characteristics of older generations.

To achieve these goals, longevity risk needs to be monitored closely. Analyzing longevity trends is a very complex matter. Mortality drivers are evolving over time, and using old information may lead to misleading conclusions. Not all countries make the same progress at the same time. Furthermore, socio-economic conditions create divergence in trends: events such as major economic crises or sudden political transitions may deeply alter the trend, as we have seen with the dramatic fall of life expectancy in Russia following the breakdown of the communist system.

In the presentation below, Daria Ossipova highlights some of the key challenges involved in making a comprehensive estimation of longevity.