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Concentration of risk

\ˌkɑnsənˈtreɪʃən\ \ʌv\ \rɪsk\

This is a measure for how concentrated longevity risk is among individual members of a given population.

For example, a pension plan that includes one participant with a very large pension who makes 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.

Keep exploring our Lexicon of Longevity
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