Club Vita & Longitude Exchange eye more transparent, efficient longevity market

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Longevity analytics firm, Club Vita has partnered with Bermuda-based insurtech Longitude Exchange, the world-first digital marketplace for trading in index-based longevity risk, to improve both the transparency and efficiency of the longevity risk transfer market.

Partnership, joint venture imageLongitude Exchange launched on March 1st in Bermuda and will soon release its digital marketplace, designed to connect longevity risk hedgers with investors on a web-based ecosystem that’s purpose-built for longevity risk.

The aim is to drive down frictional costs and timelines through standardisation, while also providing price transparency and presenting an option for secondary liquidity, all of which is expected to generate more transaction volume.

Just days after its official launch, the insurtech has partnered with global provider of longevity analytics, Club Vita, who works with pension funds in the UK, Canada, and the U.S., and also supports those that manage longevity risk, such as insurers, reinsurers, and asset managers.

The new collaboration will see the pair integrate Club Vita’s longevity risk classification services into Longitude Exchange’s digital marketplace. This will enable risk takers and cedents to tailor longevity risk derivative instruments specifically to their needs while encouraging the development of a liquid secondary market.

Douglas Anderson, Founder and Chief Visionary Officer of Club Vita, commented: “We’re very excited to see the launch of Longitude Exchange, with the expected rapid growth in volume of pension risk transfer deals in the UK, US and Canada in the coming years. We have long believed that an effective way to parameterize and trade longevity risk will become essential for increasing capacity in the market. This will be vital in enabling more pension plans and insurers to transfer and manage their longevity risk, and ultimately improve the financial security of pensioner populations worldwide.

“We’re now seeing strong demand for longevity risk transfer, and greater interest in parametric forms of structuring contracts.”

Avery Michaelson, Founder of Longitude Exchange, said: “Any market needs an agreed unit of measurement for it to function – and the longevity market is no different. With the classification systems developed by Club Vita to parameterize longevity trend risk for pension and annuity liabilities, we can enable market participants to trade in a common currency, effectively matching up buyers and sellers and encouraging secondary trading by appealing to a broad spectrum of risk takers.”

“Longitude Exchange’s experience in structuring index-based longevity risk transfer transactions for insurers, together with their investment in new technology, feels like a perfect match for our data-driven longevity insights. We can’t wait to get started,” added Anderson.

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