Dutch longevity increasing; pension funds and insurers to look at risk transfer

by Artemis on November 26, 2010

We wrote yesterday about the changes to longevity expectations in the UK according to an actuarial study. Now it seems the Dutch have completed a similar study into their populations life expectancy and concluded the same: that longevity is increasing and pensions funds and insurers need to learn to deal with that risk.

The Wall Street Journal reports that the Dutch Actuarial Association has published new life expectancy forecasts for the Dutch population and have found that their previously forecast rate of increase is being exceeded. This means that many pension funds and insurers will have been underestimating their longevity liabilities and will now need to make adjustments and preparations to manage the risk of increased longevity in their plan members.

Dutch insurers fear that the increased financial responsibilities caused by longevity will hurt their solvency in years to come. It’s expected that many will increase their premiums and also begin to look into risk transfer options such as longevity swaps and buy-outs.

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