Too Much Risk to Insure? The Australian (non-) Market for Annuities

While retirement income products have become more important in Australia in recent years, the growth in these has been predominantly in phased withdrawal products which offer no longevity insurance. The life annuity market has virtually disappeared, exposing Australians to much greater uncertainty about their well-being in later life than is necessary. We suggest that both the private market and government intervention will need to be harnessed to address this issue, including better co-ordination across key policy agencies. While inaction will lead to a long term prospect of arbitrary and ill-considered government action to meet the realised uninsured outcome, there are signs of a collaborative effort to revitalize the market.