Swiss Re announces GBP 1.4 billion longevity insurance cover for AkzoNobel's UK pension fund
24 May 2012, London
- Longevity insurance contract covers GBP 1.4 billion (USD 2.2 billion) of liabilities and almost 17 000 members of one of AkzoNobel's UK pension funds - Swiss Re solidifies position as re-/insurer of choice for longevity
Swiss Re has completed a GBP 1.4 billion longevity insurance contract with one of the UK pension funds of Akzo Nobel N.V., written through Swiss Re's UK subsidiary ReAssure Ltd. The agreement reinforces Swiss Re's position as a leader in the longevity market, where it remains the only insurer to have successfully deployed large net capacity to take on longevity risk directly from a pension fund.
The agreement covers close to 17 000 individuals and their future contingent beneficiaries who were members of the Akzo Nobel (CPS) Pension Scheme at 1 August 2011.
Costas Yiasoumi, Head Longevity Solutions, Swiss Re Corporate Solutions, says: "We are proud to once again take the lead in longevity insurance. We offer a unique proposition. Whereas the UK pension longevity market tends to be dominated by intermediaries who write and then sell on the exposure, this deal stands out in that all of the longevity exposure is held on our own balance sheet."
This deal is consistent with Swiss Re's pioneering work in the longevity insurance market. In 2007, the company was a leader in the longevity hedge market with its benchmark transaction with Friends Provident. In 2009, it closed a GBP 1.0 billion longevity insurance contract for the Royal County of Berkshire Pension Fund. In 2010, the company issued USD 50 million of longevity trend risk bonds to the capital markets through the Kortis Capital Ltd. ("Kortis") securitisation programme.
The latest transaction confirms that pension funds and insurers are becoming more comfortable with longevity solutions. It also highlights Swiss Re's ability to put its large net capacity to work by creating innovative solutions for both public and corporate sector clients.
Alison Martin, Member of Swiss Re’s Group Management Board and Head of Life & Health, says: "The pension funds of corporate and public sector organisations are gaining a better understanding of the potential risks arising from their longevity exposures. As a natural home for longevity risk and with a track record in innovation, Swiss Re is in a unique position to engage directly with these funds and create the solutions they need."
"Our strong mortality position means that Swiss Re has capacity to take on more longevity risk, and maintain our position as the re-/insurer of choice in the UK and abroad."
AkzoNobel and the trustees chose Swiss Re having evaluated proposals from different counterparties.
Costas Yiasoumi says: "Longevity contracts are very long-dated and pension fund trustees need counterparties that are in this market for the long haul. As a well-diversified re-/insurer with a 150-year track record, we were able to give AkzoNobel, the pension plan trustees and its advisors the necessary confidence for the long-term."
Notes to editors
For more information on this transaction and/or access to experts related to this release please contact Swiss Re media relations at firstname.lastname@example.org or +41(0)43 285 7171.
The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Dealing direct and working through brokers, its global client base consists of insurance companies, mid-to-large-sized corporations and public sector clients. From standard products to tailor-made coverage across all lines of business, Swiss Re deploys its capital strength, expertise and innovation power to enable the risk taking upon which enterprise and progress in society depend. Founded in Zurich, Switzerland, in 1863, Swiss Re serves clients through a network of over 60 offices globally and is rated "AA-" by Standard & Poor's, "A1" by Moody's and "A+" by A.M. Best. Registered shares in the Swiss Re Group holding company, Swiss Re Ltd, are listed on the SIX Swiss Exchange and trade under the symbol SREN. For more information about Swiss Re Group, please visit: www.swissre.com or follow us on Twitter @SwissRe.
Swiss Re Corporate Solutions
Swiss Re Corporate Solutions offers innovative, high-quality insurance capacity to mid-sized and large multinational corporations across the globe. Our offerings range from standard risk transfer covers and multi-line programmes, to highly customised solutions tailored to the needs of our clients. Swiss Re Corporate Solutions serves customers from over 40 offices worldwide and is backed by the financial strength of the Swiss Re Group. For more information about Swiss Re Corporate Solutions, please visit: www.swissre.com/corporatesolutions.
AkzoNobel is the largest global paint and coatings company and a major producer of specialty chemicals. We supply industries and consumers worldwide with innovative products and are passionate about developing sustainable answers for our customers. Our portfolio includes well known brands such as Dulux, Sikkens, International and Eka. Headquartered in Amsterdam, the Netherlands, we are a Global Fortune 500 company and are consistently ranked as one of the leaders in the area of sustainability. With operations in more than 80 countries, our 55,000 people around the world are committed to excellence and delivering Tomorrow’s Answers Today™.
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