longevity hedging

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.

Pension plans in Canada are expected to increasingly look to insurance and reinsurance capital to offload the risks of their pensioners living longer than expected through longevity swaps in 2017, according to a report.

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.

Abbey Life Assurance Company Limited (a subsidiary of Deutsche Bank) has completed a £1 billion longevity swap transaction benefiting the Manweb Group of the Electricity Supply Pension Scheme, part of Scottish Power UK PLC’s pension arrangements for subsidiaries.

Divergent mortality rate improvements through socio-economic groups creates difficulties with the establishment of a market-based approach to longevity risk transfer, and could limit available reinsurance capacity for the risk, according to the 2016 OECD Business and Finance Outlook.

The use of longevity hedging instruments, such as swaps and reinsurance, is expected to grow in 2016, with longevity risk increasingly on the agenda for pension funds, while reinsurer appetite for assuming longevity risks remains strong, according to Willis Towers Watson.

The €6 billion longevity risk transfer hedge completed recently by Dutch headquartered life, pensions and annuities focused insurer Aegon, which Artemis covered here yesterday, was supported by reinsurance capacity from Canada Life Re.

Dutch headquartered life, pensions and annuities focused insurer Aegon has completed its third longevity risk transfer transaction, hedging €6 billion of longevity reserves in the Netherlands to further reduce its exposure to longevity improvements.

As the longevity reinsurance market continues to grow in volume and expand its reach, executives from Reinsurance Group of America (RGA) highlighted a competitive sector during the first-six months of the year.