The LLMA Longevity Indices will be used as a global reference for the transfer of longevity risk from hedgers to investors and other counterparties.
The LLMA Indices will act as a robust reference for longevity and mortality contracts between counterparties. The four Indices cover England and Wales, Germany, the Netherlands and the USA; and can be accessed on the LLMA website. The Indices will be launched on the Bloomberg platform later this year.
The LLMA's various member firms have between them seen most of the major longevity transactions undertaken to date, helping ensure that the Indices have a consensus acceptance.
Daniel Ryan, Chairman of the LLMA Index Committee (and Head of Research & Development at Swiss Re) commented:
“This is a major milestone in the LLMA's work to support the development of a traded market in longevity and mortality-related risk. Global longevity exposures are measured in trillions of dollars, far in excess of the capacity that exists amongst insurers and reinsurers to provide longevity protection to counterparties such as pension plans.
"Developing an avenue through which investors can take exposure to longevity will offer additional capacity to the industry.”
“The LLMA’s members have been working for some years now to construct capital market instruments to package longevity risk into tradable portions and to provide a benchmark. This collaborative industry initiative addresses a fundamental need – that of providing trading for the transfer of insurance risk – which is now supported by the LLMA Longevity Index.”
