Pensions - Articles - Zurich completes £50m longevity swap

 Mercer acted as adviser on the transaction, which saw Zurich retain 25% of the longevity risk, reinsuring the remaining 75% of the longevity risk with Pacific Life Re. 

 The transaction announced today is the fourth streamlined longevity swap that Zurich and its partners have carried out for smaller-sized defined benefit pension schemes, and the third this year.

 Last month, Zurich announced two longevity swaps covering liabilities of £600m for the Pirelli General Pension and Life Assurance Fund, and the Pirelli Tyres Limited 1988 Pension and Life Assurance Fund, which were reinsured with Pacific Life Re.

 Jim Sykes, Zurich’s Chief Operations Officer, said: “We are delighted to announce this transaction. The cost and complexity of carrying out a longevity hedge has typically precluded schemes with fewer members from de-risking in the past. The scale of this transaction shows how the streamlined solution can make longevity risk hedging accessible to smaller pension schemes.

 “The deal, coming shortly after our £600m transaction with Pirelli, reaffirms Zurich’s appetite to write business across a diverse size range within this market.”

 Andy McAleese, Head of Annuity Transactions at Pacific Life Re commented: “We are pleased to continue our partnership with Zurich and to have helped the scheme trustees reduce their exposure to longevity risk. This transaction demonstrates that longevity cover can be priced and executed quickly and that pension schemes now have a greater choice of options to meet their risk management needs.”