Longevity Risk:Every Living Breath Counts

The range of product development and resultant opportunities surrounding the subject of longevity keeps getting wider and riper for detailed probing. Almost like panning for gold in the Klondike days, for some aging is the new gold. Maximize this, minimize that in an aging world.

Take the pension fund world for example. Swiss Re the global Re-insurance player just released a report discussing “Longevity Risk and Protection for Canadahttp://media.swissre.com/documents/Longevity_Canada_Oct11_Final.pdf

Pulling a definition from Swiss Re – “Longevity risk is the financial risk that people live longer than predicted. Underestimating life expectancy by just one year can push a pension fund’s liabilities up by 5%, so getting it right is a major challenge for pension funds and annuity providers.” My, what have we become in our old age? A Longevity Risk.

I won’t go in to the detailed jargon from the report, but it strikes me there are a lot of insurance folks working long hours at the watch, on mortality bonds and pension product developments. It begs the question – what’s the so what for us? Well we’ve all kicked in on CPP and RRSP’s and some have company pension plans , so keeping current with how longevity risk factors can influence these things is something we should be paying attention to with greater interest.

This Swiss Re report is worth reading to get an industry view of issues that not only reflect on our financial hardiness, but also how our every living breath counts on the longevity risk time clock!

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