Introduction

Emma McWilliam, Howie Timothy and Matt Thomas

Living a long healthy life is a natural desire, and humankind actively seeks to maximise its fleeting duration on Earth. We are succeeding. Centenarians are rapidly rising in number and the elderly are one of the fastest growing parts of our global population. Whilst this is to be celebrated, it also raises challenges regarding how individuals manage their wealth and how society should provide a backstop for those who live beyond their retirement savings.

In recent history, society has supported individuals in financially preparing and planning for their retirement through a wide range of savings vehicles, pensions and insurance arrangements. These are not without risk though. For entities funding such arrangements (be that an employer, an insurance company or government), there is a risk that individuals covered will live longer than anticipated. This exposure is known as longevity risk: the topic of this book.

Managing longevity risk requires an understanding of a wide range of issues, from the measurement of longevity risk for pricing, reserving and setting aside capital, to the management of risk through de-risking, reinsurance and capital markets solutions. These

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