Longevity swap news

The latest mortality data for the UK from the recently published new Continuous Mortality Investigation (CMI) model showing that lower levels of mortality improvement continue in England and Wales suggests that downward pressure on longevity reinsurance pricing will continue, reducing longevity swap premiums, according to Aon.

Hymans Robertson, a consultancy that facilitates pension risk transfer solutions including longevity swap and reinsurance transactions, has named Michael Abramson as a Partner and Risk Transfer Specialist, joining the company from Prudential.

Prudential Insurance Company of America (PICA), part of the Prudential Financial, Inc. group, has completed a $1.8 billion longevity reinsurance arrangement for Scottish Widows Limited, a subsidiary of Lloyds Banking Group plc.

Bermuda-based reinsurer PartnerRe has underwritten a £725 million longevity reinsurance arrangement for UK specialist defined benefit pension fund insurer Pension Insurance Corporation plc (PIC), the first deal between the two companies.

The outlook for longevity swap market activity in 2018 is positive, according to consultancy and pension risk specialist Mercer, but there can be no guarantees on the availability of reinsurance capacity to support transactions, with competition expected to be high.

Independent pensions consultancy Hymans Robertson has hired Baljit Khatra, an actuary with significant experience in longevity swap and reinsurance arrangements, from Mercer, as the firm looks to expand its capabilities to help pensions with their longevity risk transfer needs.

Aon was the broker behind the placement of a £900 million asset and longevity risk transfer arrangement for UK insurer Liverpool Victoria (LV=), which saw Reinsurance Group of America (RGA) assuming the risks from a portfolio of LV=’s annuity business.

Reinsurance Group of America (RGA) has completed a £900 million reinsurance transaction covering a portfolio of annuity business from UK insurer Liverpool Victoria (LV=), in a deal that saw both the asset and longevity risk transferred.

Prudential Retirement, a division of Prudential Financial, Inc., has entered into its sixth longevity reinsurance agreement since 2014 with Legal & General (L&G), covering $800 million (£600mn) of its pension liabilities against longevity risks.

The cost of entering into longevity risk transfer and reinsurance arrangements is at a historical low, according to Amy Kessler, Head of Longevity Risk Transfer at Prudential Financial, as lower-than-expected longevity improvements feed through into the cost of capacity.