Swiss Re extends its longevity reinsurance expertise to Aviva as part of the largest such transaction completed to date. The transaction means that the Aviva Staff Pension Scheme has insurance protection to cover its financial commitments if its retired members live longer than expected.
Thierry Léger, Global Head of Life & Health Products at Swiss Re says: "We are delighted to be supporting Aviva with this transaction. It is a landmark deal for the longevity market because it proves that longevity reinsurance solutions can serve the needs of our largest insurance clients. We know that life expectancy is growing – this type of insurance provides peace of mind that there is protection in place no matter how long people live."
Swiss Re's latest longevity reinsurance agreement covers 19 000 members receiving pensions from the Aviva Staff Pension Scheme. It also covers their widows, widowers, or civil partners. Swiss Re worked with Aviva and two other reinsurers to transfer the longevity risk related to GBP 5 billion of liabilities within the Aviva Staff Pension Scheme to Aviva Life & Pensions UK Ltd and then to the reinsurance market.
Daniel Harrison, Global Head of Longevity Solutions at Swiss Re says: "There is a compelling rationale for pension plans and insurers to transfer their longevity risk to reinsurers. We have a natural offset with our mortality business, the capacity to write the business onto our balance sheet, and the expertise to tailor the transaction to meet our client's needs."
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