PartnerRe expands on Manulife longevity reinsurance deal

PartnerRe has expanded on its recent longevity reinsurance transaction with Canadian insurer Manulife, growing the protection provided to cover around 30,000 annuitants.

Bermuda headquartered global reinsurance firm PartnerRe completed in January and announced in March that it had entered into a longevity reinsurance deal with Canadian insurer Manulife covering the longevity risk associated with 25,000 of its annuitants.

Now, PartnerRe has announced a second longevity reinsurance transaction between the pair, again taking on longevity risk associated with an in-force block of Manulife’s Canadian individual payout annuities.

This second arrangement adds another 5,000 annuitants longevity risk to this coverage, meaning PartnerRe now reinsures roughly 30,000 of Manulife’s annuitants longevity exposure.

“We are delighted to have been able to build on the success of the previous transaction and the strong partnership developed with Manulife, to now complete a second longevity transaction. We are very proud that PartnerRe’s global expertise in Longevity enables us to support our Canadian clients in achieving their business objectives,” commented Alan Ryder, CEO of PartnerRe North America Life.

Kevin O’Regan, CEO, Europe, Middle East, Latin American Life and Longevity for PartnerRe, added, “PartnerRe has been at the forefront of developing longevity reinsurance for over 20 years. We are here to use our expertise, strong execution skills and risk capacity to serve our clients. It is particularly gratifying for our team to be recognized as an exceptionally helpful and knowledgeable partner.”

These arrangements help Manulife by securing the future payout value of the underlying annuities against the risk of annuitants living longer lives, hence the longevity risk associated with the policies. Providing greater uncertainty of expected cashflows, by transferring this risk to a recognised global reinsurance firm, like PartnerRe.

People living longer lives causes annuities firms to make payments for longer than originally forecast. So it’s valuable to transfer this risk and hedge out the longevity exposure associated with the portfolio of annuity contracts.

Manulife has clearly had a lot of longevity risk to transfer, as earlier this year RGA Life Reinsurance Company of Canada (RGA Canada), part of global life reinsurer Reinsurance Group of America, said it had also entered into a transaction to reinsure the longevity risk associated with 45,000 annuitants of Manulife.

Read about numerous historical longevity swap and longevity reinsurance transactions, in our Longevity Risk Transfer Deal Directory.

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