Legal & General partners with Club Vita on longevity risk analysis

UK insurance and investment group Legal & General is partnering with Club Vita, an initiative of Hymans Robertson, the independent consultancy and actuarial firm with a focus on pension risk, on longevity risk analysis.

Club Vita is Hymans Robertsons longevity analytics hub, which enables UK workplace pension schemes to come together to share their data on longevity and mortality expectations. The data is analysed to assist with the benchmarking of longevity risk and to assist in research and product development and available to the members of Club Vita to assist in their own longevity risk management.

Hymans Robertson announced yesterday that it is partnering through Club Vita with Legal & General’s bulk annuity team from within its Retirement business. Hymans said that the partnership would enhance the expertise of both businesses through the sharing of insight on pensioner mortality experience.

Head of Bulk Annuities and Longevity Insurance at Legal & General, Tom Ground commented on the partnership; “Club Vita’s granular and extensive longevity data, together with its thorough quality assurance processes, allows great depth and breadth of analysis when assessing longevity risk. Our partnership will enable us to have a unique insight into expected pension scheme mortality experience building on our already extensive in-house expertise and knowledge base, built up over more than 25 years in the bulk annuity market.”

“Legal & General’s bulk annuity and longevity insurance business has enjoyed strong new business growth in 2013 as more sponsors and trustees look to transfer scheme risks to insurers. Given the expected continued growth next year and beyond in the market, joining the Club Vita community will help us continue to enhance our pension scheme de-risking proposition.”

Douglas Anderson, Partner at Hymans Robertson and founder of Club Vita, added; “We’re delighted to welcome Legal & General to our community. Club Vita started life almost five years ago with 57 visionary members, and has now expanded to include over 175 schemes. By tracking the emerging survival patterns in a diverse population of 1.3m live pensioners, schemes are equipped to take early action and make the right decisions with confidence. ”

“In addition, the great insight and expertise that Legal & General has in this field will help Club Via enhance our ability to spot new patterns for the benefit of all parties. As more schemes take advantage of risk transfer products, our collaboration provides an exciting new driver to the ongoing growth of the club.”

Hymans Robertson is very active in attempts to develop instruments and a market in longevity risk transfer. Just last week it announced that it would be working on a project to attempt to quantify longevity basis risk with Cass Business School.

Legal & General has a significant role in the longevity market, as it both holds and assumes longevity risks through its insurance business and passes on longevity risk through large reinsurance transactions. In January 2012 Hannover Re assumed a £1 billion portfolio of longevity risk from Legal & General UK, then in February 2013 Legal & General and Hannover Re participated in the largest UK pension longevity risk transfer to date.