J.P. Morgan and the Life and Longevity Markets Association ("LLMA") jointly announce that the J.P. Morgan LifeMetrics Index will be transferred to the LLMA from today. All LifeMetrics Index data, the culmination of four years of investment by J.P. Morgan, will now be made available through the LLMA for the benefit of all market participants.
LifeMetrics is a toolkit for measuring and managing longevity and mortality risk for pension plans, sponsors, insurers, re-insurers and investors. It enables these risks to be aggregated and measured in a standardised manner. The associated Indices currently cover England and Wales, the United States, Germany and the Netherlands.
The LLMA will continue its mortality index development work and anticipates that in the near future it will launch an LLMA mortality index which can be used by market counterparties as the reference for hedging transactions. The LLMA will combine the existing LifeMetrics technology with the Association's own development work to launch the LLMA's own indices later in the year.
Over the last 12 months, LLMA member firms have been sharing intellectual property to advance the aims of the LLMA. The transfer of the LifeMetrics Index to the LLMA is the most visible and formal example of this. As a founding member of the LLMA, J.P. Morgan will continue to play an integral role in the further development of the Indices.
David Epstein, Executive Director and Head of Longevity Structuring at J.P. Morgan (and Deputy Chair of the LLMA Technical Committee), commented on the LifeMetrics transfer:
"The work of the LLMA is bringing consensus and standardisation to reference indices in the market, and, as a member of the Association, we have made a commitment to working towards a liquid and publicly traded longevity market in the UK, and ultimately globally. We felt that now was the right time to back that commitment by giving the whole market the benefit of the work that we have done at J.P. Morgan in this area."
"We are proud of what we have achieved with LifeMetrics and are delighted that it will now officially form the backbone of an industry standard through the transfer to the LLMA."
Costas Yiasoumi, Chair of the LLMA's Accessibility Committee (and Head of Longevity Solutions at Swiss Re) commented:
"The adoption of LifeMetrics by the LLMA is a significant step towards the LLMA's goal of producing widely accepted and used mortality indices. This is latest in a line of shared work that has gone between the LLMA members over the last year, and is a continued demonstration of how much commitment all the members bring to the Association."
"Over the last year those of us involved in this market have seen a growth in interest from pension plans and insurers in longevity protection. As the insurance industry's capacity to write longevity is finite establishment of a capital market investor base will contribute towards the long term availability of longevity solutions. To achieve this goal buyers and sellers in mortality index transactions need comfort that there are recognised pricing standards, actuarial data and indices that both sides can use as the basis for a transaction. We are confident that this new step, and the growing membership of the LLMA which strengthens industry consensus, will help deliver that framework."
In a separate development the LLMA also announced today that Munich Re has also become a member of the organisation, bringing the number of full LLMA members up to 12, as follows: AVIVA, AXA, Deutsche Bank, J.P. Morgan, Legal & General, Morgan Stanley, Munich Re, Pension Corporation, Prudential PLC, RBS, Swiss Re andUBS.
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