Credit Implications of the Payout Annuity Market

Olivia S. Mitchell and Kent Smetters

in The Pension Challenge

Published in print November 2003 | ISBN: 9780199266913
Published online August 2004 | e-ISBN: 9780191601323 | DOI:
 Credit Implications of the Payout Annuity Market

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This chapter examines the credit implications of various guarantees made insurers offering payout annuity products in the retirement income market. A pricing model is used to analyse the risks to profitability from unexpected increases in longevity. It is shown that future mortality improvements can have a material impact on companies with significant exposure to payout annuities.

Keywords: payout annuity; retirement income; insurance companies; risk management; guarantees

Chapter.  8826 words. 

Subjects: Financial Markets

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