A feasibility analysis of reverse mortgages in Brazil

IF 3.9 2区 社会学 Q1 URBAN STUDIES Journal of Urban Management Pub Date : 2023-12-01 DOI:10.1016/j.jum.2023.11.003
João Vinícius de França Carvalho, Gabriel Giuliano Araújo
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Abstract

In this study, we examine the feasibility of reverse mortgages in Brazil from the perspectives of both policyholders and insurers. Reverse mortgage is a financial product where the property's ownership is transferred to an insurance company in exchange for a guaranteed annuity, while the insured retains the right to use such property until their death. Using monthly real state pricing data (2008–2019) provided by FipeZAP, we employ statistical modeling to predict future prices of properties to get the future insurer's expected results, while policyholders' annuity benefits are calculated using actuarial approach. To assess attractiveness, we calculate internal rate of return for different policyholder profiles and conduct profit test for the insurer. Our results indicate that, as an investment strategy, reverse mortgage has little or no attractiveness to the policyholder despite its actuarial fairness. However, it may be a viable option for increasing retirement income in case of a consistent real estate overvaluation. For insurers, the results are unfeasible due to the extended time lag for positive financial results, which only occurs after the policyholder's death. The inclusion of safety loadings can produce more favorable outcomes. Nonetheless, we recommend incorporating reverse mortgages as an elderly policy strategy to reduce reliance on state support during retirement, even if no attractive returns are provided as a financial investment. We also discuss policy implications (e.g., right to the city) to help the elderly stay connected to social support networks and local services.

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巴西反向抵押贷款的可行性分析
在本研究中,我们从保单持有人和保险公司的角度考察了巴西反向抵押贷款的可行性。反向抵押贷款是一种金融产品,将财产的所有权转让给保险公司,以换取保证的年金,而被保险人保留使用该财产的权利,直到他们去世。利用FipeZAP提供的2008-2019年月度房地产定价数据,采用统计模型预测未来房地产价格,得到未来保险公司的预期结果,同时采用精算方法计算投保人的年金收益。为了评估吸引力,我们计算了不同投保人的内部收益率,并对保险公司进行了利润测试。我们的研究结果表明,反向抵押贷款作为一种投资策略,尽管具有精算公平性,但对投保人的吸引力很小或没有吸引力。然而,在房地产持续高估的情况下,这可能是增加退休收入的可行选择。对于保险公司来说,结果是不可行的,因为积极的财务结果的时间滞后延长,只有在投保人死亡后才会发生。纳入安全载荷可以产生更有利的结果。尽管如此,我们建议将反向抵押贷款纳入老年人政策策略,以减少退休期间对国家支持的依赖,即使没有提供有吸引力的回报作为金融投资。我们还讨论了政策影响(例如,城市权),以帮助老年人保持与社会支持网络和当地服务的联系。
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来源期刊
CiteScore
9.50
自引率
4.90%
发文量
45
审稿时长
65 days
期刊介绍: Journal of Urban Management (JUM) is the Official Journal of Zhejiang University and the Chinese Association of Urban Management, an international, peer-reviewed open access journal covering planning, administering, regulating, and governing urban complexity. JUM has its two-fold aims set to integrate the studies across fields in urban planning and management, as well as to provide a more holistic perspective on problem solving. 1) Explore innovative management skills for taming thorny problems that arise with global urbanization 2) Provide a platform to deal with urban affairs whose solutions must be looked at from an interdisciplinary perspective.
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