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The Mexican pension annuity market

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  • Impavido, Gregorio

Abstract

This paper analyzes the performance and development of the Mexican pension annuity market established as a consequence of the 1997 pension reform. The Mexican experience displays interesting characteristics providing lessons for other countries that still need to design the decumulation phase of their newly established second pillars. At the same, time it raises some technical and policy concerns that need addressing as they could hamper, in the future, the healthy development of the market. The paper concludes that: 1) general life insurance companies may better hedge longevity risk than specialized annuity companies; 2) competition should be based on prices rather than additional products; 3) better disclosure of options under the 1973 and 1997 social security laws should be given to disability and life annuitants; and 4) various measures should be taken to improve asset liability management including allowing companies to trade over the counter derivatives and substituting over time the regulatory asset liability management framework with an economic asset liability management framework.

Suggested Citation

  • Impavido, Gregorio, 2007. "The Mexican pension annuity market," Policy Research Working Paper Series 4236, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4236
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    References listed on IDEAS

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    1. Blake, D. & Cairns, A. J. G. & Dowd, K., 2006. "Living with Mortality: Longevity Bonds and Other Mortality-Linked Securities," British Actuarial Journal, Cambridge University Press, vol. 12(1), pages 153-197, March.
    2. Kevin Dowd & David Blake & Andrew J. G. Cairns & Paul Dawson, 2006. "Survivor Swaps," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 73(1), pages 1-17, March.
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    Cited by:

    1. Ben Kajwang, 2022. "Role of pension management on economic growth: A review of literature," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(6), pages 635-641, September.

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    More about this item

    Keywords

    Insurance&Risk Mitigation; Markets and Market Access; Economic Theory&Research; Non Bank Financial Institutions; Pensions&Retirement Systems;
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