Articles - Mercer welcomes further activity in longevity swap market

 Mercer welcomes the announcement today that Akzo Nobel has purchased a longevity swap from Swiss Re.
 Andrew Ward, Head of longevity swap consulting at Mercer, commented, “The completion of this transaction demonstrates that there continues to be an increasingly active and competitive market, irrespective of the recent withdrawal of some participants. It is another example of a scheme actingto take advantage of the opportunities that now existto manage risks without reducing holdings in growth assets orlocking into low yields.”

 
 Mr Ward added, "This is the sixth pension scheme longevity swap transaction completed since the start of 2011, with around £8bn of liabilities covered in total. We expect this trend to continue with a number of other transactions likely to close in the coming months.We also expect to see some transactions for smaller schemes that will take advantage of some precedents now established although issues such as pricing and counterparty security will remain a focus and will require careful consideration."