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Concentration of risk

\ˌkɑnsənˈtreɪʃən\ \ʌv\ \rɪsk\

From a longevity perspective, this is a measure of how longevity risk is distributed among the individual members of a given population. A high level of concentration would signifiy that the majority of the longevity risk is driven by a small proportion of the population.

For example, a pension plan that includes one participant with a very large pension, making up 50% of the liabilities would have a high concentration of risk. A pension plan consisting of a large number of participants, all making up a roughly equal proportion of the liabilities would have a low concentration of risk.

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