Combining internal and external hedging is key to managing longevity risk.
The article explores the best way for insurance companies to protect themselves from risks related to people living longer. By combining different strategies, like using specific data and financial tools, insurers can minimize the impact of these risks on their profits. The study shows that using a mix of internal and external hedging methods is the most effective approach. If insurers ignore certain risks, their protection strategies may not work as well.