pension risk transfer

Insurance group Zurich has completed two longevity swap transactions with pension funds of the Pirelli group, between them covering £600m of pension longevity liabilities and with 75% of the risk transferred to reinsurance firm Pacific Life Re.

UK life and longevity insurance and reinsurance firm Legal & General says it is actively quoting on more than £16 billion (over US$20.7 billion) of new longevity swaps in the UK alone, and says that it wants to take its pension risk transfer strategy, including longevity risk transfer, to the United States.

UK headquartered insurance and pensions specialist Legal & General (L&G) and German headquartered reinsurance firm Hannover Re have teamed up to complete a €200 million European pension risk transfer and reinsurance deal.

Recent high levels of activity in the UK pension risk transfer market, featuring longevity swaps and longevity reinsurance transactions, are being driven by insurance companies drive to meet Solvency II requirements.

The AXA UK pension scheme has entered into a £2.8 billion longevity swap transaction, transferring the risk that members live longer than expected to Reinsurance Group of America (RGA Re), and covering around half the closed schemes total liabilities.

Pension Insurance Corporation (PIC) has entered into a £1.6 billion longevity reinsurance transaction with the Prudential Insurance Company of America (PICA), the second transaction between the two in recent months.

Prudential Retirement, possibly the largest global player in pension risk transfer and longevity insurance, reinsurance and swaps, has appointed a new Head of Pension Risk Transfer, to lead the team.

Aon Benfield, the reinsurance and capital advisor arm of broker Aon plc, has launched ReMetrica for Life, Health & Pensions, bringing stochastic risk modelling to these lines of business, to assist with evaluating risks and reinsurance purchases.

John Towner is joining UK insurer, pension risk transfer and longevity re/insurance specialist Legal & General to head up origination for the firm’s pension risk transfer and longevity insurance or reinsurance activities.

Traditional insurance and reinsurance firms should expect an increasing amount of competition for longevity risks and longevity reinsurance transactions from capital markets participants, according to rating agency A.M. Best in a report on pension risk transfers.