GERMANY - JPMorgan has rolled out its Lifemetrics Index for pension funds in Germany to benchmark and trade longevity risk.
Dirk Popielas, head of pension advisory for Germany, JPMorgan, said: "The LifeMetrics longevity indices and LifeMetrics platform are designed to provide pension funds, insurers and re-insurers with practical tools to measure longevity risk and manage it with effective hedging solutions involving derivatives and structured products."
JPMorgan claimed the index would provide a way to transfer longevity and mortality risks to investors who have been drawn to the return and diversification benefits of insurance-links securities.
Guy Coughlan, managing director and global head of pension asset liability management at JPMorgan, said: "Germany is a large pension and insurance market in which sophisticated financial risk management techniques are widely used.
"Longevity risk management is the obvious next step."
JPMorgan launched the index in March 2007 and said it proposed to introduce similar indices to further nations.
The index was developed with Watson Wyatt and the Pensions Institute at Cass Business School. It is calculated using an independent calculation agent and is governed by and international advisory committee.
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