MetLife has successfully offered reinsurance capability, whereas Zurich has acted as middleman insurer, for a UK £340 million pension longevity swap for the Airways Pension Scheme.
Metropolitan Tower Life Insurance coverage Firm is the last word supplier of threat capital to help the longevity swap and reinsurance association.
The longevity threat was insured with Zurich Assurance Restricted, appearing because the middleman insurer, then fully-reinsured by way of a back-to-back reinsurance association out to the MetLife entity.
The longevity swap association will present revenue to the Airways Pension Scheme within the occasion that members, each energetic and deferred, dwell longer than at present anticipated, enhancing the soundness of the Scheme and supporting its ongoing threat administration technique.
In consequence, MetLife has assumed 100% of the longevity threat related to round 1,100 members of the Airways Pension.
Broking and advisory group WTW led the work for the pension trustee on this longevity swap.
Shelly Beard, WTW, defined, “This transaction marks the newest step within the Trustees’ long-term technique to handle dangers within the Scheme and we have been delighted to help with this, together with working carefully with the Trustees to design an revolutionary technique for transferring non-pensioner longevity threat. That is the second longevity swap introduced in 2024 protecting lower than £1bn of liabilities, and the fifth in recent times to incorporate non-pensioners, which matches to indicate that hedging longevity threat on this means is an choice accessible to schemes of all styles and sizes.”
Jay Wang, Head of RIS Danger Options, MetLife, added, “MetLife’s historical past and in depth experience in threat administration positions us nicely to supply Airways Pension Scheme higher certainty in managing its longevity threat. We’re happy to have been chosen because the reinsurance companion for this transaction. In step with MetLife’s New Frontier technique, our monetary energy, flexibility and robust monitor document in threat administration underscores our dedication to supporting pension schemes and insurers handle their threat and our dedication to offer revolutionary and transformative options.”
Greg Wenzerul, Head of Longevity Danger Switch, Zurich UK, additionally commented, “We’re delighted to have performed an element in supporting the Trustees ship this transaction, which offers a price efficient, easy and versatile (for the Trustees’ profit) strategy to hedging longevity threat. We consider that the standardisation accessible by way of use of the Zurich platform, which has now been used with the overwhelming majority of longevity reinsurers, offers a chance for smaller schemes to transact in an environment friendly and more and more standardised method. We are going to proceed to help and encourage the additional growth of this market, particularly with many pension schemes and sponsors more and more weighing up longer-term threat administration pathways.”
That is solely the second pure longevity swap transaction we’ve seen to this point in 2024, the first also having involved MetLife.
It’s additionally notable that, as we reported just lately, MetLife is set to establish its first life and annuity reinsurance sidecar vehicle, Chariot Re, which in future might take a share of sure pension threat switch transactions for the corporate, offering environment friendly, supportive capability.
View particulars of many longevity swaps and longevity reinsurance deals in our longevity risk transfer deal directory.
