The odds that you'll have a long, healthy life are better than ever ... and that creates a pretty hefty problem for pension funds. They need to find new ways to meet their obligations in a turbulent market, and the risk that you'll hang on forever is approaching every day. So, unless we're able to pass legislation encouraging mass suicide among the Baby Boomers (it's a joke, people, read Christopher Buckley's Boomsday to see how it shakes out), pension fund managers have a hefty dose of risk to offload -- fast. They're looking at the insurance-linked securities market as a way to handle the problem.

All joking aside, pension funds and insurers are translating to total pension liabilities of $19 trillion in the U.S. and $3 trillion in the UK, according to a Reuters report using data from International Financial Services London. And, an increase in longevity by one year could translate into a 3% jump in liabilities. Put simply, the IFSL's data means another $600 billion in the U.S. and $90 billion in the UK. Basically, everything we do to stick around longer (not that I'm discouraging it) leads to a higher and higher price tag.

Nine catastrophe bonds have matured so far in the first quarter of 2010, removing $1.8 billion in risk-transfer capacity, according to data from Reuters. The insurance industry has compensated with $508 million in new cat bond risk capital, with the busy fourth quarter helping to absorb what is maturing now. Only one cat bond has closed so far this year, The Hartford's (HIG) $180 million Foundation Re III. But, the first quarter is usually a quiet one for the cat bond market.

It partly replaces the $105 million in protection that Foundation Re D afforded. Swiss Re (SWCEY) and SCOR (SCRYY) are also among the insurance companies with bonds maturing that have at least partial coverage from new cat bond issuances. Another four bonds have matured, however, with no new related issuance, affecting Munich Re (MURGY), AXA (AXA) and others.

Mother Nature and mankind took it easy on the insurance industry in 2009. The total cost of both natural and man-made catastrophes fell profoundly in 2009, from $267 billion to $52 billion.

Insured losses fell, as well, according to Swiss Re (SWCEY). Insured natural catastrophe losses dropped to $21 billion, with the man-made variety hitting a mere $3 billion. Combined, insured losses pushed up to $50 billion in 2008, thanks in large part to the effects of Hurricanes Gustav and Ike.

Analyst upgrades:

• Jefferies upgraded Aruba Networks (NASDAQ: ARUN) to Buy from Hold following the company's Q3 results to reflect improved visibility. The firm raised its target price to $6.50 from $3.
• Citigroup upgraded Mosaic (NYSE: MOS) and Potash (NYSE: POT) to Buy from Hold and Agrium (NYSE: AGU) to Hold from Sell as it believes stronger grain fundamentals more than offset China contract risk. The firm raised its target on Mosaic to $72 from $48, on Potash to $145 from $83 and on Agrium to $55 from $36.
• Fulton Financial (NASDAQ: FULT) Was upgraded to Market Perform from Underperform at Keefe Bruyette.
• Rio Tinto (NYSE: RTP) was raised to Neutral from Sell at Goldman.
• Noble Corp. (NYSE: NE) was upgraded at Deutsche Bank to Buy from Hold.

MAJOR PAPERS:

• Last December Chemtura Corporation (NYSE: CEM), a specialty chemicals company with a market cap of about $1.9B, said it might sell itself, and now The Blackstone Group LP (NYSE: BX) and Apollo Management are in talks to buy the company, the Wall Street Journal reported.
• In part one of a series to help explain the reasons why The Bear Stearns Companies (NYSE: BSC) collapsed, the Wall Street Journal said that the troubled firm was torn apart by executives who couldn't agree on what course to take, including raising capital and slicing mortgage and related bonds from its inventory. And each of about six attempts to raise capital fell part.

OTHER PAPERS:

• The American investor and Berkshire Hathaway Inc (NYSE: BRK.A) chief Warren Buffett said the United States is already in a recession that is deeper and will last longer than the public expects, the Economic Times reported.
• According to the Telegraph, Barclays Plc (NYSE: BCS) is planning to sell Barclays Life Assurance Company, its life assurance arm, which has over GBP7B of funds under management. Sources believe potential bidders for the unit may include Pearl, Swiss Reinsurance Company (OTC: SWCEY), General Re, Canada Life and XL Re. Market commentators believe that on an embedded value basis, the unit is currently valued at around GBP1B.

It is shaping up to be another tough day for the market as traders continue to express concerns over a possible recession, disappointing earnings numbers, surging crude oil prices and persistent weakness for the U.S. dollar. However, not all the companies are joining the general market anxiety, and Swiss Re made strong gains, trading up 4.9% in the Zurich exchange, despite a plunge of 87% in its fourth-quarter net profit as investors were encouraged by its positive earnings outlook.

The world's largest reinsurer announced that its quarterly profit had dropped to 170 million Swiss francs ($161.7 million), dragged down by higher write-downs related to bad loans. Its profit numbers were down from 1.3 billion reported in the same period a year ago.

MOST NOTEWORTHY: Thornburg Mortgage, Expedia and Perot Systems were today's noteworthy upgrades:

• Jefferies upgraded shares of Thornburg Mortgage Inc Corp (NYSE: TMA) to Buy from Hold as they believe the stock is at an inflection point, characterized by accelerated earnings and dividend growth.
• Expedia Inc (NASDAQ: EXPE) was upgraded to Outperform from Neutral at Credit Suisse, as they believe the company is well-positioned to benefit from global e-travel and media opportunities, strong free cash flow, and attractive valuation.
• Perot Systems Corporation (NYSE: PER) was upgraded to Sector Perform from Underperform at RBC Capital following its Q4 report.

OTHER UPGRADES:

• HSBC raised Swiss Reinsurance Company (OTC: SWCEY) to Overweight from Neutral.
• The Estee Lauder Companies Inc (NYSE: EL) was upgraded to Equal Weight from Underweight at Lehman.
• Cantor upgraded Genomic Health Inc (NASDAQ: GHDX) to Buy from Hold.

If you're a bear, then at least another down beginning may await you in today's session. At least, that's the indication U.S. stock futures are giving this morning. As economists forecast the risk of a recession increased due to the collapse of the housing market along with the credit crunch and as oil prices jumped again on OPEC comments, it seems the bears have returned.

On Friday, U.S. stocks saw volatile session that ended with gains, with the Dow industrials rising 66 points, or 0.51%, the Nasdaq Composite up 18 points, or 0.72%, and the S&P 500 rising 7 points, or 0.52%. On the week stocks finished higher in a week full of wild swings. The Dow ended up 1.03%, the S&P 500 and the Nasdaq ended up 0.35%.

Not much economic data is due today so investors are focusing on rising oil prices, overseas activity and some M&A action.

Socially conscious investors may want to grab a copy of this week's (April 2, 2007) edition of FORTUNE magazine, which is all about the greening of corporate America. No longer can companies merely not pollute: The double bottom line of both economic profitability and social responsibility demands that companies re-engineer themselves and their products to be as environmentally friendly as possible.

Companies that are ahead of the game will prosper. Companies that lag behind in environmentalism will be punished by investors as well as the media. The article "Green is Good" summarizes the green activities of 10 well known companies that stand to reap rewards for their environmentally sensitive manufacturing and operational practices. Companies taking the lead towards a low-carbon economy are:

GE closed today at $33.87 down 20 cents, a mere blip downwards of .59 percent. GE today wasn't announcing big news, just finishing up its spinning off of its reinsurance business.  This deal makes Swiss Re the world's largest reinsurance firm. A further bonus: GE picked up an additional $1.8 billion in the deal as GE Insurance's book value increased since striking the deal.

The Insurance section of GE has cost the company a lot, losing over $700 million and needing some $3.2 billion of capital. Immelt must be thrilled to see GE finalizing this deal. As he admitted in the last investors meeting, 'he no longer has to obsessively watch the weather channel.'