How long people live has a complicated relationship with the assets life insurance companies need to support arrangements like life insurance policies, annuity contracts, pension contracts and long-term care insurance.
Swiss Re has an intense interest in how long people live, because it's the biggest reinsurance company in the world: Swiss Re protects the providers of lifespan-linked products against the risk that they might be wrong about how long the customers will live.
Analysts at the Swiss Re Institute, Swiss Re's in-house think tank, have come out with a new report about the risk that haunts life reinsurers' dreams.
The analysts assume in the report that economic growth and medical research will continue to help people live longer, because people in most of the world have been living longer.
Even before COVID-19 came along, life expectancy was starting to fall in the United States, but life expectancy might still be increasing for Americans who buy products like life insurance and annuities.
What the world's life insurers need to support products for longer-lived customers will affect all investors, because insurers manage $35 trillion in assets around the world and account for, for example, 20% of the U.S. corporate bond market.
For a look at seven things the Swiss Re analysts said about how lifespan trends interact with life insurance and the assets in the insurers' investment portfolios, see the gallery accompanying this article.
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