Abstract
Increases in longevity risk are real, large, and best transferred to the insurance/reinsurance sector, where there is a natural offset. The magnitude, drivers, and sensitivity of longevity liabilities provide the business rationale for this transfer. However, capacity issues in the insurance/reinsurance sector create the need for wider capital market longevity investors. There are both opportunities and challenges associated with this developing alternative asset class. Using the analogy of wine pairing, we develop an approach to longevity investment that takes it out of the speculative arena and into a more sustainable business practice.
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