The Cost of Retirement Income Provision: Some Quantitative Insights in Life Insurance

Giovanna Apicella (), Emilia Di Lorenzo (), Giulia Magni () and Marilena Sibillo ()
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Giovanna Apicella: University of Udine, Department of Economics and Statistics
Emilia Di Lorenzo: Complesso Monte S. Angelo, University of Naples Federico II, Department of Economic and Statistical Sciences
Giulia Magni: Sapienza University of Rome, Department of Statistical Sciences
Marilena Sibillo: University of Salerno, Department of Economics and Statistics

A chapter in Mathematical and Statistical Methods for Actuarial Sciences and Finance, 2024, pp 1-6 from Springer

Abstract: Abstract Humanity has observed remarkable improvements in life expectancy at birth. These improvements imply a greater longevity risk in the life insurance field, for pension systems and for the individuals involved in retirement planning. Our work aims to give sense of how longevity evolution reverberates into increasing costs for pension provision. We use the Lee-Carter model and the Human Mortality Database (HMD) data of six EU countries. We assess the dynamics of the price of a temporary life annuity, issued in different calendar years. With respect to the past, in all the countries under study, underwriting a life annuity is becoming progressively more expensive, with similarities between countries especially in relation to the cost of longevity risk protection for females.

Keywords: Life expectancy at birth; longevity risk; life annuities (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-64273-9_1

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DOI: 10.1007/978-3-031-64273-9_1

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