LIX Life Expectancy Marketplace
A new financial marketplace where insurers, reinsurers, pensions, banks, asset managers, hedge funds, traders and other investors can meet to buy, sell, hedge and take views on human life-expectancy risk.
What is the LIX marketplace?
Today, life-expectancy risk sits across many balance sheets, but there is no common public market where those different exposures and opinions can meet. LIX is designed to create that market. An annuity writer may want less exposure to people living longer than expected. A life insurer may carry a different exposure. A reinsurer may be willing to take risk. A bank can make a market. A hedge fund or proprietary trader may believe the market is mispricing the effect of a new medicine, a pandemic or a demographic change. LIX brings those participants into one venue.
What happens when they meet?
They do not need to agree. In fact, the disagreement is the point. Buyers and sellers put real capital behind different expectations. Their bids, offers and trades allow the market to discover and continuously reprice the market value of life-expectancy risk. That turns what is now largely a private assumption inside an institution into something that can be traded and observed.
Why this matters
A real marketplace can do two things at once. It can give institutions a new avenue to transfer risk, and it can create a live price that the rest of the economy can observe. That price can then flow into risk management, treasury, capital planning, reserves, pricing, valuation, investments, reinsurance, finance, accounting, governance and product design. The trade happens in the market; the information can travel much farther.
What a live marketplace changes
Without a market, a major change in health or mortality is interpreted inside separate institutions at different speeds. With LIX, those views can meet in one place. A pension may want to reduce exposure, a reinsurer may be willing to take it, a bank may make a market, and a hedge fund may believe the effect of a new therapy is being mispriced. As they trade, the price can move throughout the trading day. That gives the rest of the market a visible reference for how expectations are changing and gives institutions a potential avenue to hedge, rebalance or add exposure.
A marketplace for disagreement
LIX is not trying to make every institution use the same model. It creates a place where different models, different exposures and different opinions can meet through price. The market price is the result of that disagreement.