Reinsurance Group of America (RGA) has completed a £900 million reinsurance transaction covering a portfolio of annuity business from UK insurer Liverpool Victoria (LV=), in a deal that saw both the asset and longevity risk transferred.
The asset and longevity risk transaction saw RGA providing reinsurance for a block of approximately £900 million of individual annuity business underwritten by LV=.
Annuity insurers, just like pension funds, are keen to offload the longevity risk associated with their portfolios of business, but the capital-intensive asset side also requires risk transfer and with this deal RGA has developed a solution to solve both issues with one deal and reinsurer.
“This transaction supports RGA’s key initiative to expand asset-intensive partnerships in the European market,” commented John Laughlin, Executive Vice President, Global Financial Solutions, RGA. “Creating an innovative structure allowed RGA to develop an attractive longevity, risk, and asset strategy that provides significant capital and risk benefit for LV=.”
“This transaction is a key part of the risk management and capital efficiency programme LV= has been running for a number of years which is focused on reducing volatility of our Solvency II balance sheet and member outcomes,” added Mark Laidlaw, Chief Capital and Investment Officer at LV=.
The full terms of the transaction were not disclosed.
Read about many historical longevity swap and reinsurance transactions in our Longevity Risk Transfer Deal Directory.
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