Patent ID: 7840468

Claim:
A computer-implemented method for addressing mortality exposure risk in a portfolio of mortality-sensitive instruments, the method comprising: determining, by one or more processors, a mortality risk or longevity risk in a portfolio of mortality instruments; determining, by the one or more processors, a sensitivity of the portfolio to the mortality risk or longevity risk, said sensitivity measuring an effect on a value, cost, or obligations of the portfolio as a function of a change in the mortality risk or longevity risk; selecting from a plurality of standardized building block mortality derivatives at least some of which are age-based mortality derivatives, the selecting comprising reading electronic data associated with the plurality of standardized building block mortality derivatives, the selecting including selecting (i) at least one category of building block mortality derivative based on the determined mortality risk or longevity risk and (ii) a quantity of building block mortality derivatives based on the determined sensitivity; creating a mortality exposure hedge for said portfolio based on a selected plurality of standardized building block mortality derivatives; and storing electronic data associated with the mortality exposure hedge.