El seminario de divulgación científica de la Facultad de Ciencias Económicas, Empresariales y Turismo se impartirá el jueves 19 de junio por parte de la investigadora pre-doctoral Giulia Magni. La información del seminario y del ponente es la siguiente:  

Giulia Magni _ Department of Statistical Sciences, Sapienza University of Rome, Roma, Italy 

• Título de la presentación: The Cost of Living Longer: Demographic Trends and the Risk of Equity Release Products in Retirement Ages.
• Autores: Iván de la Fuente, Giulia Magni, Eliseo Navarro, Pilar Requena, Gregorio Serna 
• Fecha: jueves 19 de junio 2025 
• Hora: 14:00 - 15:00 horas 
• Dónde: Aula 1.7 de la Facultad de Ciencias Económicas, Empresariales y Turismo, en Alcalá de Henares 
• Link registro: enlace para registrarse
• Calendario seminarios: https://economicasempresarialesyturismo.uah.es/es/investigacion/seminarios-de-investigacion/

Abstract:

Population ageing is a widespread problem in developed countries, posing significant challenges to the sustainability of pension systems. This demographic change and its financial consequences are addressed by combining the results of two separate research articles. One line of research assessed  the age-specific contributions to changes in life expectancy between 1989 and 2022 in 16 countries, disaggregated by gender. Empirical analysis reveals that improvements in life expectancy are consistently driven by adult age groups, implying a marked decline in mortality rates. Although age-specific contribution patterns vary by gender and country, clustering techniques are used to identify similar dynamics across countries. Results show that for both men and women, most countries fall into a group where the contribution of adult age group is significant, some countries belong to a second group where the improvement is slightly less pronounced, and finally, few countries are in a third group where there is a strong contribution from neonatal age groups.  In response to these increases in longevity, many countries decided to carry out several reforms to make pension systems sustainable in the long run, through massive transitions from defined benefit (DB) to defined contribution (DC) schemes. However, these reforms have exposed a growing proportion of pensioners to the risk of insufficient income.  

Population ageing was therefore also the subject of the second line of research, which focused on the economic and social consequences of increasing longevity. In particular, it looked at financial products designed to supplement the income of retired people, such as equity release products (ERPs). These are typically divided into two main types: Lifetime Reverse Mortgages (RM) and Home Reversion Plans, also known as Bare Property (NP) contracts.  Our aim is to provide a Basel II/III-compliant framework to assess and compare the risks and expected losses of individual Bare Property and Reverse Mortgage contracts from the lender’s point of view. One of the main conclusions is that the lender faces higher risk with the RM than with the NP. Looking ahead, we aim to extend this analysis to a portfolio-level study, incorporating the estimation of regulatory capital requirements for institutions involved in ERP markets.