MetLife has successfully supplied 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 final word supplier of danger capital to assist the longevity swap and reinsurance association.
The longevity danger was insured with Zurich Assurance Restricted, appearing because the middleman insurer, then fully-reinsured by a back-to-back reinsurance association out to the MetLife entity.
The longevity swap association will present earnings to the Airways Pension Scheme within the occasion that members, each energetic and deferred, dwell longer than at present anticipated, enhancing the steadiness of the Scheme and supporting its ongoing danger administration technique.
Consequently, MetLife has assumed 100% of the longevity danger 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 most recent step within the Trustees’ long-term technique to handle dangers within the Scheme and we have been delighted to assist with this, together with working intently with the Trustees to design an revolutionary methodology for transferring non-pensioner longevity danger. That is the second longevity swap introduced in 2024 masking lower than £1bn of liabilities, and the fifth lately to incorporate non-pensioners, which matches to indicate that hedging longevity danger on this method is an choice obtainable to schemes of all sizes and styles.”
Jay Wang, Head of RIS Threat Options, MetLife, added, “MetLife’s historical past and intensive experience in danger administration positions us effectively to supply Airways Pension Scheme higher certainty in managing its longevity danger. We’re happy to have been chosen because the reinsurance companion for this transaction. According to MetLife’s New Frontier technique, our monetary energy, flexibility and robust observe file in danger administration underscores our dedication to supporting pension schemes and insurers handle their danger and our dedication to supply revolutionary and transformative options.”
Greg Wenzerul, Head of Longevity Threat Switch, Zurich UK, additionally commented, “We’re delighted to have performed a component in supporting the Trustees ship this transaction, which gives a value efficient, simple and versatile (for the Trustees’ profit) method to hedging longevity danger. We consider that the standardisation obtainable by use of the Zurich platform, which has now been used with the overwhelming majority of longevity reinsurers, gives a possibility for smaller schemes to transact in an environment friendly and more and more standardised method. We’ll proceed to assist and encourage the additional improvement of this market, particularly with many pension schemes and sponsors more and more weighing up longer-term danger administration pathways.”
That is solely the second pure longevity swap transaction we’ve seen thus far in 2024, the first also having involved MetLife.
It’s additionally notable that, as we reported 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 danger 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.
