By Edmund Cannon, Ian Tonks
The Pension drawback matters the altering demographic profile of extra aged and less adolescents within the economic system. realizing and tackling this forthcoming drawback is a key activity for public coverage. An annuity protects somebody from outliving their discounts, and is principal to pensions coverage. This ebook examines the different sorts of annuities on hand, how those annuities are priced, the background of annuities, how annuities markets functionality: how they paintings, and are they effective. It presents a world comparability of annuity markets, and examines fresh advancements in annuity markets.
Governments around the globe are moving their pension regulations clear of pay-as-you-go platforms in the direction of person discount rates schemes. those reductions have to be switched over right into a pension at retirement, and annuity markets offer this functionality. This e-book is a finished research of annuity markets. The booklet starts off by way of outlining the context of public coverage in the direction of pensions coverage. It then explains the different sorts of annuities to be had, targeting the USA and united kingdom, and the way those annuities are priced, analyzing pricing and booking equipment from an actuarial point of view and in addition describing mortality dimension. the following chapters describe the heritage of annuities, and the event of annuity markets in international locations except the united kingdom and US. The e-book then outlines the speculation at the back of annuites, and explains how annuities insure shoppers opposed to toughness hazards. the following bankruptcy describes how annuities markets functionality: how they paintings, and whether or not they are effective, prime onto a dialogue of the annuity puzzle. The ebook concludes through discussing fresh advancements in annuity markets.
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We also have annuity quotes for level annuities with a ﬁve-year guarantee, meaning that in the event that the annuitant dies, the annuity income continues to be paid into the annuitant’s estate for ﬁve years after the annuitant’s death. Moneyfacts also publish RPI-linked annuities, which pay an annuity income that rises in line with the UK’s Retail Price Index, and hence provides protection against inﬂation to the annuitant. In Cannon and Tonks (2004b) and in the previous section, we discussed potential problems with inferring an average annuity rate from a crosssection of annuity quotes in the voluntary market.
5 for the period as a whole, and for two sub-periods. 9. 57 over the last six years and the difference between the two series is falling over time. 2 per cent over the second half of the data-set for 2001–07. 5. Time series properties on compulsory annuity and 10-year bond rates 1994– 2007 Annuity rate (%) Panel A: 1994–2007 Mean St. Dev. Correlation Panel B: 1994–2000 Mean St. Dev. Correlation Panel C: 2001–07 Mean St. Dev. 57 Note: This table presents descriptive statistics on the time series of average annuity rates, government rates, and corporate bond rates over the period 1994–2007 and for the two sub-periods.
7. Annuity rates for women in the compulsory annuity market Feb-07 Aug-06 Feb-06 Aug-05 Feb-05 Aug-04 Feb-04 Aug-03 Feb-03 Aug-02 Feb-02 Aug-01 Feb-01 Aug-00 Feb-00 Aug-99 Feb-99 Aug-98 Feb-98 Aug-97 Feb-97 Aug-96 Feb-96 Aug-95 Feb-95 Aug-94 2% Description of annuity markets 30 25 Number of quotes for conventional level annuities Number of quotes for level annuities, enhanced, smokers, etc. 8. Number of annuity quotes in Moneyfacts Although the number of annuity providers quoting annuity prices in the Moneyfacts database has fallen, insurance companies may still be willing to provide annuities if contacted directly by individuals or annuity brokers.
Annuity Markets by Edmund Cannon, Ian Tonks