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    Looking into longevity: Q&A with Professor David Blake

    Looking into longevity: Q&A with Professor David Blake

    25 September 2023 Responsible investment, Fixed income
    Longevity expert Professor Blake discusses COVID, pension schemes and the longevity market

    Defined benefit pension schemes are increasingly focusing on the impact of longevity risk on their liabilities. Howard Kearns, longevity director at Insight, speaks to Professor David Blake, professor in the Faculty of Finance at Bayes Business School and Director of the Pensions Institute, on the impact of the pandemic on longevity, the consequences for pension schemes, and the future of the longevity hedging market.

    • The COVID-19 pandemic will not have a large impact on mortality in the UK over the next few years, research suggests, though indirect, longer-term implications could be significant.
    • There has been a small improvement in defined benefit pension scheme funding because of the increase in COVID-19 related deaths, but no meaningful change in the pricing of longevity risk as a result of the pandemic.
    • The market for longevity hedging is growing strongly. It remains dominated by insurers and reinsurers, but there are ongoing initiatives to encourage capital market investors to take on longevity risk, which would significantly increase capacity.

    Contents

    • COVID-19 and the implications for longevity
    • How pension schemes have been affected by the pandemic and its impact on longevity
    • What has happened to longevity expectations as a result of the pandemic?
    • The impact of the pandemic on the longevity hedging market
    • How can pension schemes hedge their longevity risk today?
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