Longevity risk transfer news

New York based law firm Sadis & Goldberg LLP has announced the hiring of Gregory Hartmann to its Corporate and Financial Services Groups. Hartmann was most recently with Prudential supporting pension and longevity risk transfer.

Legal & General has made two appointments into its Pension Risk Transfer business, the segment where the firm assists pension schemes to de-risk, including through longevity swaps and reinsurance arrangements.

Pension fund longevity exposure is over-valued, resulting in a potential for over UK£25 billion to be wiped off the collective deficit of UK defined benefit pensions if more accurate longevity assumptions were used, according to specialist longevity risk information provider Club Vita.

Global insurance player Zurich has completed another longevity swap transaction, helping a smaller UK pension plan to cover £300 million of its longevity related pension liabilities, with SCOR providing the reinsurance capacity to back the deal.

Activity in the pension scheme longevity swap and hedging market should increase in 2017 as a number of market forces that slowed activity this year bed in, and pensions become more of a focus for reinsurance capital, according to Shelly Beard of Willis Towers Watson.

The Canada Life Assurance Company has helped the pension plan of the Canadian Bank Note Company, Limited to a streamlined longevity swap, a $35 million transfer of longevity risk associated with its pensioners which is the smallest transaction we’ve seen at Artemis.

Reinsurance Group of America (RGA) has entered into a €1.3 billion longevity swap and reinsurance agreement with AXA France, a deal that covers over 15,000 annuitants.

Due to a dislocation in current pricing for longevity swaps, caused by lower rates of improvement in mortality in the UK, retirement and health advisory Aon Hewitt, a division of the global insurance and reinsurance broker, has warned pension schemes to delay any longevity transactions for the moment.

Insurance group Zurich has completed another longevity swap transaction, helping an unnamed pension fund enter into a risk transfer arrangement covering £50m of pension longevity liabilities and with 75% of the risk transferred to reinsurance firm Pacific Life Re.

Insurance or reinsurance sidecar vehicles will be put to work to enable investors to co-invest alongside insurers and reinsurers in the pension and longevity risk transfer market, predicts Prudential’s Amy Kessler.