longevity risk transfer

The UK market for longevity risk transfer and reinsurance has remained resilient during the Covid-19 pandemic, according to Prudential Retirement, a business unit of Prudential Financial, Inc., which has closed $1.7 billion of longevity reinsurance deals in the first-half of this year.

The UBS (UK) Pension and Life Assurance Scheme has entered into a £1.4 billion longevity swap arrangement, with global player Zurich acting as the insurer for the transaction and Canada Life Re providing reinsurance capital.

Global reinsurance giant Munich Re has completed a £1 billion longevity swap arrangement for the Willis Pension Scheme, in a longevity hedging deal that covers some 3,500 pension scheme members.

Insurance and reinsurance broker and consultancy Aon has warned UK pension schemes not to over-react to the recent short-term spike in mortality rates in the country, as the impact to longevity risk assumptions may not be as significant as it seems.

Canada Life Reinsurance took EUR 5.3 billion of the long-term longevity risk associated with EUR 13.5 billion of in-force liabilities of NN Life’s portfolio, in the recently completed longevity swap and reinsurance arrangement.

NN Life, part of the Nationale-Nederlanden (NN Group), has secured reinsurance and swap arrangements with leading reinsurers Canada Life, Munich Re and Swiss Re to transfer all of the longevity risk associated with some EUR 13.5 billion of pension liabilities from the Netherlands.

The sudden rise in deaths in the United Kingdom due to the Covid-19 coronavirus pandemic could result in some pensions having to post more collateral against their longevity swaps, as report suggest.

Prudential said that it has executed another $6 billion of longevity reinsurance transactions with UK pension risk transfer specialist life insurer Rothesay Life, in two transactions that are the seventh and eighth between the pair.

Global life, longevity and morbidity reinsurance firm Pacific Life Re has completed the second largest UK longevity swap transaction on record, taking on UK £10 billion of longevity risk from Lloyd’s Banking Group pension funds.

The longevity swap market is forecast to experience record levels of activity in 2020, with availability of reinsurance capacity likely to be a key consideration for pensions looking to offload the risk of their members living longer.