pricey issue for pension funds and insurers across the world. Longevity

risk – which is under pressure from a population aging in an uncertain

way – is now giving rise to a new asset class. Investment banks are

seizing the opportunity to make money from betting on mortality with

longevity swaps and soon-to-be-tradable longevity bonds. With US$23

trillion in pension liabilities globally, taking the risk to the capital

markets makes sense and it has a diversifying appeal for investors. But

for its insurers and super funds to reap the benefits of these new

assets, Australia needs to get moving on an annuities market and

longevity index.