This Panel Paper reviews recent evidence on moral hazard in the insurance industry. We discuss three types of moral hazard and detail how each is an asymmetric information problem.

The cost of capital is an important factor determining the premiums charged by life insurers issuing life annuities. Insurers will be able to offer more finely priced annuities if they can reduce this cost whilst maintaining solvency. This capital cost can be reduced by hedging longevity risk with longevity swaps, a form of reinsurance.

China is currently undergoing the largest regional migration in the world’s history. Young rural workers are moving to urban areas, often in a different province, for substantial periods of their working lives. Social security policy in China, while framed by national protocols and policy guidelines, is administered at more than 2000 lower-level jurisdictions, typically cities and counties, and at present this compromises pension entitlements of China’s 150 million rural migrant workers.

Longevity risk is amongst the most important factors to consider for pricing and risk management of longevity products. Past improvements in mortality over many years, and the uncertainty of these improvements, have attracted the attention of experts, both practitioners and academics.

Modeling of subjective survival is critical to the use of mortality expectations in economic  models and the life insurance industry. Subjective scaling factors that are used to adjust average survival probabilities for individual expectations are often based on a single observation of personal life expectancy and assumed to be constant for any projected target age.

Many pension plans in the Netherlands guarantee that the (nominal) benefits will never decrease. The benefits can increase if the financial position of the fund allows, according to the so-called conditional indexation rule.

One of the major challenges for national governments, pension funds, and life/pension insurance companies is to stimulate people to think about their retirement income.

Mortality models used to assess longevity risk and retirement funding have been extended to stochastic models with trends and systematic risk. Systematic risk cannot be readily diversified in an insurance pool or pension fund. It is an important factor in assessing solvency and highlighting the tail risk in longevity insurance and pension products.

This paper reconsiders the predictions of the standard option pricing models in the context of incomplete markets.

Low levels of non-default decision making among superannuation members in Australia are assumed to be evidence of a lack of interest and capability.

Dette notatet tar for seg to problems tillinger: Organisering av tjenestepensjoner i privat sektor gjennom brede ordninger på tvers av enkeltvirksomheter og spørsmålet om hvordan kostnader i innskuddsbaserte tjenestepensjoner har utviklet seg.

This report primarily examines part-time pension recipients who retired between the years 2005–2009. The report is based on register data, through which, for the first time, it is now possible to comprehensively take into account all earnings that accrue statutory pension.