Longevity hedging news

An Aon Hewitt executive told Professional Pensions that even small pension schemes should consider hedging their longevity risks or entering into longevity risk transfer transactions. To date, longevity risk transfer transactions have been large affairs with schemes worth billions involved, but the Aon Hewitt representative suggests that could change.

For pension scheme sponsors and trustees longevity risk, the risk associated with pensioners living longer resulting in pension schemes paying them for longer than expected, remains a major concern and one that has increased in importance to them in the past year, according to a study by MetLife Assurance.

Dutch based insurer Aegon reported first quarter profits were down 12% as it posted lower investment returns, was hit by administrative charges in the UK and set aside funds to manage increasing life expectancy risk in the Netherlands. Aegon have had to increase provisioning for longevity risks as increased life expectancy threatens many life and […]

The Life & Longevity Markets Association (LLMA) announced a milestone in their plans for the development of a market in tradeable longevity and mortality risk instruments yesterday with the news that they were to take ownership of the LifeMetrics Index which was created by J.P. Morgan.

The Life & Longevity Markets Association (LLMA), a not for profit association dedicated to promoting liquidity in the traded longevity and mortality risk markets, has announced their latest member reinsurer Munich Re. The largest reinsurer in the world takes membership of the LLMA to 12 they said yesterday.

Hymans Robertson has published its Managing Pension Scheme Risk Report Q4 2010. In the report which looks at the state of the pension scheme risk management and risk transfer market they suggest that significant growth is likely over the next couple of years and beyond.

Just the other day we wrote about the news that the longevity risk transfer market was showing a growing interest in the Netherlands as the next likely market to see a longevity swap completed. To date only the UK has seen a deal where a reinsurer (or other counterparty) takes on the risk of longevity […]

We’ve received a press release from JPMorgan which gives much more detail on the longevity hedge transaction they have entered into with Pall (which we announced earlier). This deal is groundbreaking in terms of structure and has the potential to accelerate development in the longevity hedging and risk transfer market. The press release in full […]

Sources have told us, and the FT.com is reporting this morning, that JPMorgan have recently completed an important longevity hedging transaction which could help the market achieve its goal of becoming liquid enough for future trading to occur. The deal sees JPMorgan take on £70m worth of the longevity risks of the UK pension scheme […]

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 […]