Longevity reinsurance news

Hymans Robertson LLP, the pensions and financial services consultants, expects that longevity risk transfer activity will remain high in the United Kingdom across the coming decade, with as much as UK £250 billion of longevity swaps likely to be transacted by 2031.

Longevity swap pricing is expected to remain attractive through the coming year, as reinsurance capital to support large pension risk transfer deals remains abundant and slower mortality improvements feed into reinsurance pricing, according to Willis Towers Watson (WTW).

MetLife, Inc., one of the largest life and annuities insurance groups in the world, has announced that it completed four UK based longevity reinsurance transactions with Legal & General Assurance Society Limited (Legal & General) in 2020.

The market for longevity swaps and longevity risk transfer has hit forecasted volumes in 2020 despite the implications of the global COVID1-9 pandemic and Willis Towers Watson believes another busy year is ahead in 2021.

The BBC Pension Scheme has added new benefit security for members with the completion of a UK £3 billion plus longevity swap transaction, with the assistance of global insurance firm Zurich and global reinsurance firm Canada Life Re.

Reinsurance Group of America (RGA) has provided the Barclays Bank UK Retirement Fund, a pension scheme and fund managing assets on behalf of UK employees of the bank, with a UK £5 billion longevity swap transaction.

Pacific Life Re, the global life, longevity and morbidity reinsurance firm, has completed a UK £3.7 billion longevity swap transaction for the Prudential Staff Pension Scheme, in an arrangement that was entered into using a Guernsey captive structure.

Metlife, Inc., one of the largest life and annuities insurance groups in the world, completed a second longevity reinsurance transaction in the UK market, reinsuring $320 million of pension liability related longevity risk for Rothesay Life.

The pension fund risk settlement market has  been up and down throughout 2020, as the pandemic related uncertainty has caused activity to fluctuate in the longevity swap, reinsurance and bulk annuity market. But Aon believes total volumes could still hit UK £50 billion this year.

Insurance and reinsurance broker and risk advisory Aon has warned today that re/insurers and pension funds need to avoid over-reacting to how inclusion of COVID-19 deaths changes recognised mortality models, saying that “longevity risk has not gone away.”