The Life and Longevity Markets Association has unveiled set of four longevity indices to be used a global reference for the transfer of longevity risk from hedgers to investors and other counterparties.
According to the LLMA, which includes the likes of Prudential, AXA and RBS among its members, the indices will act as a robust reference for longevity and mortality contracts between counterparties.
Accessible via the LLMA website, the four indices cover England and Wales, Germany, the Netherlands and the USA. They will be launched on the Bloomberg platform later this year.
Between them, the not-for-profit body's member firms have seen most of the major longevity transactions taken to date. This has helped to ensure that the indices have consensus acceptance, it said.
Daniel Ryan, who is chair of the LLMA index committee, as well as being head of research and development at Swiss Re, said the indices were a 'major milestone' in the body's work to help develop a traded market in longevity and mortality-related risk.
'Global longevity exposures are measured in trillions of dollars, far in excess of the capacity that exists amongst insurers and reinsurers to provide longevity protection to counterparties such as pension plans.
'Developing an avenue through which investors can take exposure to longevity will offer additional capacity to the industry.'
Mr Ryan said the initiative would address a fundamental need to provide trading for the transfer of insurance risk.
The move follows last week's launch of a series of longevity indices by Deutsche Börse and Club Vita.