On the annuities markets

While the phase of accumulation in the pension systems has been extensively analyzed, the analysis of the phase of des-accumulation is scarce. This is not innocuous, especially in countries where, as a consequence of the reform to their pension systems, the benefits will be provided via periodic withdraws and/or annuities (a powerful instrument to deal with several risks) bought in private markets. Indeed, Chile shows one of the highest rates of annuitization in the world. Some of the conclusions that have reached some specialist that have analyzed this market are:

It is urgent to develop and disseminate high-quality data on mortality tables
It is critical to understand how the regulatory design affects the demand and supply of annuities
It important to enhance consumer education and the quality of reporting of the information provided by insurance companies

This is an area where many countries have a pending agenda. At the CISS we are writing a report on annuities. Advances of the report will be disclosed via this blog.