Longevity risk of society and financial market instruments

Ewa Uznańska

Abstract

Ageing of society is a progressive process that intensifies the problem of providing a stable public pensions system. As a consequence. responsibility for an adequate financial security of retirees is increasingly being moved from the public sector to the private sector. Therefore a pressing challenge is to ensure by the financial market intermediaries the effective and customized individual financial instruments securing old age pension. The general aim of the dissertation is to identify, systematize and recognize today's financial longevity instruments for the deliberate constructing an efficient pension system. The dissertation concerns the problematic aspects of ensuring the financial stability of people of retirement age in a continuing trend in population ageing. Depending on the citizens' needs, market conditions, implemented legal regulations as well as the level of pension system development, demand and supply of financial instruments hedging individual longevity risk are different in countries that are the basis of the analysis in the dissertation. No less important herein is the governments' and financial institutions' exposure to longevity risk and the degree of development of the life market in particular countries. The access to instruments hedging aggregate longevity risk may affect the fact that instruments hedging individual longevity risk will be offered by pension funds and insurers.