Reinsurance Sidecars: The Next Stage in the Development of the Longevity Risk Transfer Market

Nicholas Bugler, Kirsty Maclean, Vladimir Nicenko and Patrick Tedesco

North American Actuarial Journal, 2021, vol. 25, issue S1, S25-S39

Abstract: The longevity risk transfer market in Europe and North America remains in its infancy despite rapid growth in recent years, and further qualitative progress is needed to develop a commoditized market. Reinsurance sidecars, which are commonly used in the property and casualty market in the United States, have enormous potential to play an important role in such development. Transaction structures involving reinsurance sidecars can be adapted to benefit cedants and sponsoring reinsurers and also to attract a broader spectrum of investors and participants by reducing the long-tail risk inherent in longevity risk transfer. While several transaction structures are possible, each would fundamentally provide additional capital to support transactions in a form that is not subject to a requirement to hold a regulatory solvency capital buffer, thereby enabling sponsoring reinsurers to offer keener pricing to cedants. As a result, a European Union-based cedant could gain considerable capital benefits by reinsuring longevity risk, market risk or both to a reinsurance sidecar.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/10920277.2019.1673183 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:uaajxx:v:25:y:2021:i:s1:p:s25-s39

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/uaaj20

DOI: 10.1080/10920277.2019.1673183

Access Statistics for this article

North American Actuarial Journal is currently edited by Kathryn Baker

More articles in North American Actuarial Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().