Longitude Solutions recently expanded its team with the addition of David Schrager and Alan Rae. Our team now consists of three senior partners, each with deep knowledge of the Longevity market and an extensive track-record in longevity and other capital management transactions.
Recently, all three of Longitude Solutions’ partners attended the Longevity 14 conference in Amsterdam.
Our Founding Partner, Avery Michaelson, was a plenary speaker presenting on the evolution of the Longevity market and de-risking transactions. His talk highlighted the range of solutions that have been used by market participants to mitigate longevity risk and capital charges, as well as providing some suggestions for the future. Avery’s comments focused on the concerns of hedgers in considering their de-risking alternatives, as well as the aspects of the longevity risk market pertinent to investors. (download presentation)
Also, our partners interacted with insurers, reinsurers, academics, service providers and regulators who attended the conference. Through these conversations we gained greater understanding of the near-term objectives of certain market participants and attempted to fill in important knowledge gaps along the way.
Here are Longitude’s key take-aways from the conference based on speaker’s presentations and conversations with longevity market participants:
- The longevity market is using a wider variety of structures for risk-transfer than in the past.
- There is increasing participation from new counterparties, including the capital markets.
- Capital markets participation is desired by all incumbents as capacity could become constrained.
- The recent evolution of mortality rates in the UK and the Netherlands makes the upside to longevity risk a (previously) underestimated component in risk transfer.
- Limited diversity of counterparties is a growing concern for regulators, as this concentrated counterparty credit risk is correlated with longevity risk.
- Regulators (particularly the DNB) would welcome an industry standard approach to model the basis risk of index-based longevity transactions.
Please reach out to any of our partners if you would like to discuss any of these topics in detail.