Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

One in four FTSE 100 companies expected to complete pension risk transfer deal by end of 2012

Share

Hymans Robertson, the specialist pensions advisory and management firm, has published a report looking at the health of the UK’s FTSE 350 companies pension schemes. The report finds that the aggregate deficit, or shortfall, in these pension schemes has seen a £33 billion improvement. As a result Hymans Robertson suggests that pension schemes focus will turn from deficit reduction to risk management during the coming year.

Deficit and shortfall reduction has been the top priority among pension schemes over the last few years but now that they are making some progress on these issues Hymans expects them to turn their attention to risk transfer and risk management. Longevity risk is an increasingly high profile issue for pension schemes and risk transfer or getting some liabilities off their books and into the capital markets seems to be the best approach to manage that risk.

Hymans Robertson suggests that they expect to see as much as a quarter of UK FTSE 100 firms participating in a material risk transfer by the end of 2012. That could be through longevity hedging or a longevity swap, a buy-out or a buy-in.

Of course, that will push the burden of the shortfall or deficit onto the counterparty in some cases and it will still have to be dealt with but right now companies are keen to transfer some or all of their pension risks off their balance sheets.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis ILS NYC 2023 - Insurance-linked securities conference in New York City

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.