International Adverse Selection in Life Insurance and Annuities

31 Pages Posted: 21 Sep 2003 Last revised: 5 Oct 2022

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David McCarthy

Imperial College Business School

Olivia S. Mitchell

University of Pennsylvania - The Wharton School, Pension Research Council; University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

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Date Written: September 2003

Abstract

This paper evaluates the extent of adverse selection in life insurance and annuities in international markets, for both group and individual products. We also compare results with prior analyses of adverse selection in international annuity markets, focusing on the US, the UK, and Japan. Our results help assess the extent to which life insurers can hedge mortality exposure by writing both life insurance and annuities, and they may be used to determine a normal range for adverse selection in international insurance markets.

Suggested Citation

McCarthy, David and Mitchell, Olivia S., International Adverse Selection in Life Insurance and Annuities (September 2003). NBER Working Paper No. w9975, Available at SSRN: https://ssrn.com/abstract=447263

David McCarthy

Imperial College Business School ( email )

South Kensington Campus
Room 312
London SW7 2AZ
United Kingdom

Olivia S. Mitchell (Contact Author)

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States