Patent ID: 8311922

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, the selecting comprising reading electronic data associated with the plurality of standardized building block mortality derivatives, the selecting being based on at least one of (i) the determined mortality risk or longevity risk of the portfolio and (ii) the determined sensitivity of the portfolio to the mortality risk or longevity risk; creating a recommended mortality exposure hedge for said portfolio based on a selected plurality of standardized building block mortality derivatives; calculating a residual risk of the mortality exposure hedge by evaluating the mortality exposure hedge against a portfolio risk profile based on the sensitivity or the mortality risk and confirming that the residual risk falls below a predetermined threshold; and storing electronic data associated with the mortality exposure hedge.