longevity risk

Punter Southall, a UK based actuarial and investment consultant to many large UK pension schemes, has published a press release commenting on the recent ITV longevity swap transaction warning pension schemes of the sometimes limited nature of the risk transfer a longevity swap provides.

Pension Corporation continues to be one of the most active participants in the pension risk transfer and de-risking marketplace as they complete regular transactions with counterparties. Their latest transaction see’s them enter into a pension buyout agreement with Nova Chemicals UK Pension Plan (press release available here).

ITV plc, a British television broadcaster, has announced that it has entered into a £1.7 billion longevity swap with Credit Suisse to remove the risks associated with increases in pension liabilities due to longer than expected life spans of members of their defined benefit pension scheme. Towers Watson advised the ITV Pension Scheme on the […]

To date there has only been a single insurance-linked security transaction which transferred the risk of policyholders living longer, or longevity risk, to the capital markets. That transaction, Kortis Capital Ltd. which was sponsored by Swiss Re, successfully came to market in December 2010 but so far no-one else has tried to emulate the deal.

The market for transferring the risks associated with pension schemes, including transferring longevity risk, has continued to grow during the last quarter in the UK. Q2 became one of the busiest quarters for the pension risk transfer market since the credit crisis of 2008, resulting in £1.4 billion of risk transfer deals completed, comprising buy-ins, […]

KPMG reports today in a press release that the volume of pension buy-in deals in the UK has reached over £3 billion in the past year. Buy-ins see pension funds transfer some of their liabilities to the insurance market often with the sole purpose of offloading the longevity risk which is inherent in many large […]

Pension Corporation have entered into another deal which see’s them take on the assets and liabilities of a UK pension scheme. The latest transaction see’s Pension Corporation take on over £60m of pension liabilities from manufacturer Toray Textiles.

For pension scheme sponsors and trustees longevity risk, the risk associated with pensioners living longer resulting in pension schemes paying them for longer than expected, remains a major concern and one that has increased in importance to them in the past year, according to a study by MetLife Assurance.

Pension Corporation, a UK insurer of pension plans and one of the largest players in the longevity risk transfer and pension de-risking markets, is seeking additional funding totalling UK£400m from an investment of fresh capital from Luxembourg based specialist investment fund Reinet.

The volume of deals completed to de-risk pension schemes of their longevity and other risks looks set to grow according to a report from Hymans Robertson. Their Managing Pension Scheme Risk Report for Q1 2011 looks back at the deals done in the past quarter and ahead to the prospects for Q2 and beyond.