This chapter demonstrates the importance for insurance and pension companies of correctly measuring mortality and life expectancy. The analysis focuses on mortality at higher ages (65–95), in line with an interest in pension-related applications where the risk associated with longer-term cash...

For annuity providers, a higher life expectancy is not always positive news, as it potentially implies increased future costs, since benefits must be provided over a longer period of time. The underlying risk behind the unexpected improvement in life expectancy is called longevity risk. One way...