Impavido, Gregorio2012-06-052012-06-052007-05https://hdl.handle.net/10986/7101This paper analyzes the performance and development of the Mexican pension annuity market established as a consequence of the 1997 pension reform. The Mexican experience displays interesting characteristics providing lessons for other countries that still need to design the decumulation phase of their newly established second pillars. At the same, time it raises some technical and policy concerns that need addressing as they could hamper, in the future, the healthy development of the market. The paper concludes that: 1) general life insurance companies may better hedge longevity risk than specialized annuity companies; 2) competition should be based on prices rather than additional products; 3) better disclosure of options under the 1973 and 1997 social security laws should be given to disability and life annuitants; and 4) various measures should be taken to improve asset liability management including allowing companies to trade over the counter derivatives and substituting over time the regulatory asset liability management framework with an economic asset liability management framework.CC BY 3.0 IGOACCUMULATED SAVINGSACCUMULATION PERIODACCUMULATION RATEACTUARIESAGENTSANNUITIESANNUITYANNUITY MARKETSANNUITY PROVIDERSASSETSAUCTIONSBASIC PENSIONBENEFICIARIESBENEFIT FORMULABROKERSCENTRAL BANKSCOMMISSIONSCREDIT RISKDEFINED BENEFIT SCHEMESDEFINED BENEFITSDEREGULATIONDERIVATIVESEFFICIENT MARKETEQUITY INVESTMENTEXPECTED RETURNEXPECTED VALUEFAIRFINANCIAL ASSETSFINANCIAL SECTORGDPGNPGOVERNMENT BONDSHOUSINGINDIVIDUAL ACCOUNTSINFLATIONINFLATION RISKINSURANCE BENEFITSINSURANCE INDUSTRYINSURANCE LAWINSURANCE PRODUCTSINSURERSINTEREST RATEINTEREST RATESINTERNATIONAL FINANCIAL INSTITUTIONSINVESTMENT PERFORMANCELIFE INSURANCELIFE INSURANCE COMPANIESLIQUIDITYLONGEVITY RISKLOSS RATIOMARKET CONCENTRATIONMARKET INFORMATIONMARKET PENETRATIONMARKET POSITIONINGMARKET SHAREMARKET STRUCTUREMORTALITY TABLESMUTUAL FUNDSNON-LIFE INSURANCEOLD AGE BENEFITSPENSION FUNDPENSION FUND ADMINISTRATORSPENSION REFORMPENSION REFORMSPENSION RIGHTSPENSION SYSTEMPENSIONERSPENSIONSPOLITICAL ECONOMYPOTENTIAL DEMANDPREMIUMSPRICE INDEXPRICE VARIATIONPRIVATE INSURANCEPRODUCT PRICINGPROFIT MARGINSPROFITABILITYREAL INTEREST RATEREGULATORY FRAMEWORKREINSURANCERESERVERESERVESRETIREESRETIREMENTRETIREMENT BENEFITSRISK PREMIUMSALESALESSAVINGSSECURITIESSOCIAL SECURITYSOLVENCYSPREADSTATISTICAL DATASTOCKSTRUSTSUNDERWRITINGUNEMPLOYMENTVALUATIONWorld Bank10.1596/1813-9450-4236