Longevity swap news

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.

Prudential Retirement is providing reinsurance to assume $1.2 billion of longevity risk from Pension Insurance Corporation (PIC), the fifth such transaction the pair have entered into since 2015, with now around $5 billion of longevity risk reinsured between the pair.

Robus Group, the insurance management, fiduciary and financial management group, has added longevity swap and risk transfer expertise in Guernsey, hiring David Riley who was previously with Marsh captive management as a risk consultant.

Insurance and reinsurance management solutions provider Artex Risk Solutions (Artex) said today that it is administering the Guernsey based insurance vehicle set up by the British Airways Pension Scheme (APS) for its recent longevity swap and reinsurance transaction.

UK life insurer Zurich Assurance Ltd. is looking to enhance its view of longevity risk so it can better manage and transfer exposures accumulated through insurance products sold to pension funds, with the help of risk modelling firm RMS and its Longevity Risk Model.

Availability of reinsurance capacity and access to it is increasingly important in a longevity risk transfer market, where pension and insurer appetite to offload longevity risks keeps increasing, but reinsurance capacity and pricing can sometimes be constrained.

Aon has hired Steve Bale from Legal & General to join its Risk Settlement team, the area of the brokerage that focuses on life and pension risk transfer, including longevity swaps and reinsurance.

The British Airways Pension Scheme (APS) has entered into a £1.6 billion transfer of longevity risk, using a captive insurance cell in Guernsey to intermediate the deal and gain more direct access to reinsurance capacity, provided by Partner Re and Canada Life Re.

Marsh & McLennan Companies, the broking and consultancy giant, has transferred a huge £3.4 billion chunk of longevity risks from its MMC UK Pension Fund to reinsurance capital through a deal transacted via a Guernsey based incorporated cell company.

Insurance-linked securities (ILS) has potential in helping counterparties to achieve longevity risk transfer and in financing or backing large transactions for bulk annuity insurers, according to consultants Hymans Robertson.