Conning Research: Increased Longevity Awareness Expands Retirement Income Opportunities for Insurers
(Hartford, CT) April 27, 2011 – The transfer of longevity risk creates a tremendous growth opportunity for insurers who develop and distribute retirement income products. However, profitable growth depends on managing the risks associated with these products, according to a new study by Conning Research & Consulting.
“The life industry has grown significantly during the past two decades by helping individuals accumulate retirement assets,” said Scott Hawkins, analyst at Conning Research & Consulting. “However, Baby Boomers are increasingly concerned about outliving their accumulated assets as they near or enter retirement. At the same time, pension plan sponsors are concerned about managing their assets to meet their obligations to current and future retirees as life spans increase. The longevity risk concerns of both individuals and groups represent significant premium growth opportunities for insurers over the medium term.”
The Conning Research study, “Expanding Retirement Income Opportunities for Insurers: Managing Increased Longevity Risk” identifies and quantifies growth opportunity for insurers that provide retirement income products that manage longevity risk. It explores key longevity and investment risks to profitable growth that insurers face as they develop this opportunity and how insurers could manage these risks.
“This transfer of longevity risk creates a tremendous growth opportunity for insurers who develop and distribute retirement income products,” said Stephan Christiansen, director of insurance research at Conning. “Opportunities can be developed from exploiting differences in mortality of specific populations or groups, from fluctuations in specific age cohorts along the mortality/longevity spectrum, or from providing solutions to mismatches between investment and payment durations. However, profitable growth for insurers offering these products also depends on developing effective solutions to challenges of product distribution and on successfully managing the broad-scale accumulation of longevity risk within the insurer’s own portfolio.”
“Expanding Retirement Income Opportunities for Insurers: Managing Increased Longevity Risk” is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com.
About Conning Research & Consulting
Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning Research has published independent insurance industry research for 50 years, including market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. Conning is headquartered in Hartford, CT.