Longevity reinsurance news

The Bank of England is monitoring the trend of UK pension fund or insurer longevity risk and liabilities going offshore through reinsurance transactions, such as longevity swaps, as non-EU re/insurers can hold less capital against longevity risk, according to a report from Bloomberg.

Demand from life insurance and reinsurance firms will drive continued growth and also global expansion of the market for pension longevity risk transfer and swaps, according to a report from Prudential Financial, Inc.

The establishment of a captive insurance entity for longevity swap transactions in an offshore domicile presents significant cost reductions and a beneficial operating environment for market participants, according to industry experts.

Financial, actuarial and business consultancy with a specialist focus on pensions, investment and insurance, Lane Clark & Peacock LLP (LCP), has announced the appointment of Murray Blake within its pension de-risking practice.

A lack of manpower and resources for pricing longevity risks in the global reinsurance market is resulting in pinch points at times, making timing especially important for pension funds looking to hedge their longevity exposure, according to Aon Hewitt.

Club Vita LLP, an initiative launched in 2008 by Hymans Robertson LLP to help pension plans better measure and manage their longevity, is expanding into Canada as longevity exposure has become the biggest unmanaged threat to defined benefit (DB) pension plans in the country.

The global longevity risk transfer market is primed for further growth as pension funds increasingly look to de-risk their pensions plans and, similar “catalysts that transformed” the U.K. longevity reinsurance sector begin to make moves in the U.S. and elsewhere, says Amy Kessler.

The Brazilian pension fund market faces growing longevity risk and the regulator is calling for insurers to create products to address this, which will result in new opportunities for the longevity swap and reinsurance providers to tap into a new geographic region.

One of the subsidiaries of Prudential Financial Inc. has entered into a new longevity reinsurance arrangement with UK-based insurer Legal & General Group, covering $2.9 billion of its pension liabilities against the risk of longevity improvements.

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.