#jsDisabledContent { display:none; } My Account | Register | Help

# Age at risk

Article Id: WHEBN0042305243
Reproduction Date:

 Title: Age at risk Author: World Heritage Encyclopedia Language: English Subject: Collection: Publisher: World Heritage Encyclopedia Publication Date:

### Age at risk

Age at Risk (AaR) is a time-based risk measure designed to measure longevity risk in actuarial models.

AaR represents certain quantile for a given probability distribution, so is similar to Value at Risk[1] (VaR). But, AaR measures risk amount as time(time until an adverse event) rather than value(loss amount).

Age at Risk is a special case of Time at Risk (TaR). When TaR is applied to a household's financial planning rather than corporate finance, TaR in this case is referred to as AaR.

In fact, TaR is an expanded idea from AaR which is originated by actuaries. In actuaries's view, loss model and survival model are identical, so they could naturally transform VaR into time-based measure. Survival model is actively used in life insurance modeling, but the application is not limited to this area. Anything that has lifespan can be a subject of survival model; for example, durability of products, default of bonds, bankruptcy of companies etc. AaR had been used in models that include a person's lifetime as a random variable, and it was naturally expanded to TaR as actuaries generalized subjects of models.

## Definition

Mathematical definition of AaR is same as that of VaR.[2]

However, value-based random variable is replaced with time-based one (age), and given time-horizon is replaced with given finance structure of a household.

## References

1. ^
2. ^

This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and USA.gov, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for USA.gov and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.

Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.