Deutsche Börse launches business with longevity data

11 March 2008

With Xpect Data, Deutsche Börse is expanding its Market Data & Analytics department to include data from the new insurance risks asset class. Deutsche Börse will deliver data on life expectancy and mortality risk via Xpect Data. In addition, Deutsche Börse will introduce indices, under the name Xpect-Indices, which will serve as securitization for life and pension insurance risks or as the basis for other financial products.

Xpect Data delivers the most up-to-date figures for quantitative valuation of longevity risk. For the first time, this data on population trends will be compiled from various – sometimes exclusive – sources, and checked and disseminated by Deutsche Börse on a monthly basis. Data from this area was previously only available in the market every three to five years.

The delivery of geographically-based data as far as municipal level even allows conclusions to be drawn about regional risks. The data forms the basis for the calculation of generation mortality tables, which provide information on the future life expectancy of the population according to year of birth and gender.

Unlike the data previously available, Xpect Data is based exclusively on transparent and objective statistics, and not on expert opinions. It is particularly important for the calculation of risk positions for life insurance and pension funds that longevity data is up to date and of top quality. As the population's life expectancy increases, so too do payment obligations and risk positions.

Along with raw data on longevity, Deutsche Börse will also offer indices under the name Xpect-indices. These indices will offer not only an information function but also serve as the basis for securitization of longevity risks. Such transactions may be based on broad, comprehensive indices, or indices tailored by Deutsche Börse to the needs of its clients. These indices are used for the securitization of life insurance risks in particular. Securitization increases capital efficiency and lowers insurance companies' required risk capital.

Market Data & Analytics also compiles, distributes, and markets independent capital market information, such as price data, trading statistics, and back office information for banks and financial institutions. Market Data & Analytics calculates and publishes more than 2,100 indices in total. Deutsche Börse thus ranks among the world’s major index providers.

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