Back to Lexicon

# Trend risk

\trɛnd\ \rɪsk\

The risk that mortality rates decrease (or increase) at a different rate to that assumed, resulting in people living for different lengths of time than predicted.

For large populations this is usually the largest form of longevity risk (assuming that basis risk is minimized by referencing an appropriate population or by using an appropriate ratings factor model for the baseline assumption and that the law of large numbers reduces the idiosyncratic risk).