TY - JOUR T1 - Longevity Risk Transfer to Institutional Investors: <em>A New Era</em> JF - Special Issues SP - 25 LP - 32 VL - 2012 IS - 1 AU - Michael Amori AU - Pretty Sagoo AU - Onur Uncu Y1 - 2012/09/21 UR - https://pm-research.com/content/2012/1/25.abstract N2 - The insurance-linked securities (ILS) market has been developing since late 1990s. The most recent addition in the transfer of insurance risks to institutional investors is longevity. In this article, we look at how the market for longevity risk has evolved and how we see it developing in the future. In particular, we discuss the AEGON-Deutsche Bank transaction, which is the most recent milestone in transferring longevity risk to institutional investors. This transaction has a few notable aspects contributing to its success: The out-of-the-money nature of the risk, simple and transparent payout structure, and referencing publicly available population mortality rates were among the key features. Going forward, there are still some challenges to be faced by the longevity market. Nevertheless, we expect to see many similar transactions and growth in this market due mainly to two reasons: increasing investor appetite to diversify asset portfolios and insurance companies’ need for hedging longevity risk. ER -