Longevity reinsurance news

Broking group Aon appears to be expecting another large longevity swap deal to complete before the end of the year, forecasting today that 2021 longevity swap volumes will reach £15 billion.

There have been £12 billion worth of longevity swaps in the UK pension risk transfer market in 2021, with total risk transfer including bulk annuity buy-in and out deals expected to reach £40 billion for the year.

The market for longevity swaps has outpaced the use of bulk annuities, when it comes to pension risk transfer deals, through the first-half of 2021 and the second-half could also be busy as there is spare capacity in the market to be used, broker Aon notes.

Global reinsurance giant Swiss Re has provided capacity to support a UK £3.7 billion longevity swap deal that uses a cell structure to intermediate the risk transfer for the ICL Group Pension Plan, one of the pension schemes of Fujitsu in the UK.

Prudential Financial Inc. and insurer Zurich have worked together to provide an unknown UK pension scheme with a £6 billion longevity swap and reinsurance arrangement.

The recent £3 billion longevity swap between the AXA UK Group Pension Scheme and reinsurance firm Hannover Re represented a new first for the longevity risk transfer market, a largely non-pensioner deal, which analysts at Jefferies highlight as a win-win transaction for both parties.

Canada Life Reinsurance has taken EUR 4.7 billion of long-term longevity risk off the hands of life and annuities focused insurer Athora’s European arm in a recent longevity reinsurance arrangement.

The AXA UK Group Pension Scheme has entered into a £3 billion longevity swap with reinsurance firm Hannover Re, in a new first for the longevity risk transfer market, a largely non-pensioner deal.

France-headquartered global reinsurance firm SCOR has put in place a sidecar-like, quota share retrocession vehicle named Mangrove Insurance PCC Limited through which it transfers some of its longevity risk to third-party investors.

MetLife, Inc., one of the largest life and annuities insurance groups in the world, has announced that it completed two more UK based longevity reinsurance transactions with pensions insurance specialist Rothesay Life, covering $5 billion of risk.