Evidence on Annuity Choices in Chile

This study analyzes the empirical determinants of the annuity choice using data on retirees from the Chilean labor market. We find that sales agents, knowledge about the pension system, and greater education will be associated with an increase in the annuitization probability. Also, we expect that people in poor health are less likely to annuitize, which is supportive of the traditional view of adverse selection in the annuity market. Finally, we analyze the effects on annuity choices of the introduction of a Minimum Pension Guarantee.

¿Sangre azul en números rojos? La participación de la nobleza de Amberes en el mercado de censales (1490-1493)

This article investigates the activities of noblemen on the annuity market of the city of Antwerp at the end of the fifteenth century. In postwar historiography, the consumption of credit by noblemen was often considered as an indication that those noblemen were in dire straits, whereas more recent interpretations suggest that noblemen were important creditors to both princes and towns. The analysis of the activities of twenty-eight noble lineages on the Antwerp credit market reveals that noblemen appear more often as buyers than as sellers of credit, but also that they were considered creditworthy, and that noblemen were careful to avoid using estates that were important for the family’s noble status as collateral. The nobility's annuity traffic cannot be understood from a one-sided perspective, such as that of the overarching grand narrative of the perpetual crisis of the pre-modern nobility, or that of the nobleman-banker.

Challenges of developing a takāful retirement annuity plan in Malaysia

Purpose This paper aims to explore the challenges facing the development of a takāful retirement annuity plan in Malaysia. It also aims at exploring a new platform to re-launch the same product after being withdrawn from the Malaysian annuity market a few years ago. Design/methodology/approach The research adopts a qualitative approach to address the possible challenges hindering the development of a takāful retirement annuity plan in Malaysia. The research will not discuss the Sharīʿah issues deemed settled in previous researches but will only focus on technical challenges related to the instruments of investment and prudential measures. Findings The research found that various challenges face the development of a takāful annuity plan in Malaysia. Some of those challenges are the downsizing of the ṣukūk market, the shortage of long-term ṣukūk, longevity risk and risk-based capitalization. The research found that there is a need for a diversified portfolio of securities instead of solely using ṣukūk as an investment instrument in this product. Originality/value Re-launching the takāful annuity plan in Malaysia requires the identification of actual challenges facing the development of such a product. The product purported to be re-launched would benefit a large segment of retirees who do not have enough savings during the retirement age. The introduction of such a product will also expand the takāful market in annuities, which remains untapped.

Securitization of longevity risk – survivor swap perspective

Purpose The purpose of this paper is to present a clear path to securitize the longevity risk with two distinct swaps in order to inspire a new Chinese life market. Design/methodology/approach Studies on longevity risk securitization consist of three aspects, respectively, instrument design, pricing methodology and mortality projection. The swaps designed are referenced, respectively, to vanilla and complex survivor swaps (Dowd et al., 2006; Lin and Cox, 2005). Methods applied are RHH model and Gompertz law for mortality projection, as well as two-factor Wang transformation for pricing. Findings This paper figures out the market price of risk in Chinese annuity market, checks for the sensitivity of the price to parameters and tests the hedging effects by Monte Carlo simulation. Originality/value Based on the theoretical and numerical results, this paper suggests an effective way to possibly witness the birth of New Life Market in China.