Longevity reinsurance news

Insurance group Zurich has completed another longevity swap transaction, helping an unnamed pension fund enter into a risk transfer arrangement covering £50m of pension longevity liabilities and with 75% of the risk transferred to reinsurance firm Pacific Life Re.

Phoenix Life Holdings Limited, a subsidiary of life insurance and reinsurance consolidator Phoenix Group Holdings Limited, has agreed to acquire the Abbey Life business from Deutsche Bank, a deal that will provide the troubled bank with £935m ($1.215 billion) in cash.

Growth in longevity reinsurance and longevity risk transfer business could help life reinsurers to elevate their returns on equity (ROE) above 10%, but at the same time there is an expectation that growing demand for longevity capacity will change reinsurers risk profiles, according to S&P.

Insurance group Zurich has completed two longevity swap transactions with pension funds of the Pirelli group, between them covering £600m of pension longevity liabilities and with 75% of the risk transferred to reinsurance firm Pacific Life Re.

Demand for longevity reinsurance and risk transfer among UK life insurers could rise, as their Solvency II ratios have fallen in the wake of lower investment yields and the fallout from the Brexit vote.

UK life and longevity insurance and reinsurance firm Legal & General says it is actively quoting on more than £16 billion (over US$20.7 billion) of new longevity swaps in the UK alone, and says that it wants to take its pension risk transfer strategy, including longevity risk transfer, to the United States.

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.

Prudential has once again increased the longevity reinsurance protection it is providing to UK re/insurer and pension risk transfer specialist Legal & General, with a fourth longevity reinsurance agreement between the pair announced today.

Specialist longevity risk information provider Club Vita and insurance and reinsurance player Legal & General have teamed up to bring longevity risk transfer to a wider audience of pension schemes, with the goal of providing an automated longevity insurance pricing service.

Chief Financial Officers (CFOs) and pension trustees have divergent attitudes when it comes to de-risking company pension schemes, with CFOs more willing to reduce longevity risks than trustees understand, according to research from Hymans Robertson.