Pension deficits driving longevity swaps market

Burgeoning deficits in pension programmes are driving the longevity swaps market.

Shrinking asset bases are also a key factor, according to Blaise Bourgeois, life chief risk officer at AXA Group. 
"Innovative solutions such as longevity swaps provide for a capital market hedge against any further deviation in mortality improvements already factored into the reserves of long-term liability holders at times when the cost of an ageing population is becoming a critical issue for public and private sector fundings alike in many countries. This means that the longevity swaps market has a huge potential for growth," he says.

The comments appear in a special ILS intelligence report in the summer issue of Intelligent Insurer