Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • January 2011
01

Hannover Re takes on £1bn Pilkington longevity risks

Open-access content Monday 9th January 2012 — updated 5.13pm, Wednesday 29th April 2020

Hannover Re has agreed to take on the longevity risk from Legal & General of around 11,500 former employees of the UK glass manufacturer Pilkington, totalling around £1bn pension obligations

The reinsurer is to take over the bulk of the business, while the rest will remain with Legal & General. Only the biometric risk is assumed, not the investment and inflation risks, according to Hannover Re.

The firm anticipates premium income of roughly £800 million over the entire term of the transaction, with £60 million attributable to the 2012 financial year.

Hannover Re's CEO Ulrich Wallin said the transaction "cemented the firm's leading position in the attractive longevity risks market".

He also anticipated further opportunities as companies increasingly seek to limit their direct pension obligations.

The firm added that the assumption of longevity risks forms an attractive part of its risk management since they are negatively correlated with mortality risks and therefore aid diversification.

Since its first longevity block transaction in 1998, Hannover Re has assumed pension obligations of around 5bn euro.

Commenting on the Pilkington deal, which meant that 2011 was a record year for the de-risking market, Nick Griggs, head of corporate consulting at Barnett Waddingham, said:

"The longevity market seems to be gaining momentum which will hopefully bring greater standardisation to market.  This will in turn allow a greater number of schemes to undertake similar deals. In time, smaller schemes may also be able to complete such a transaction.

"It has been suggested that insurers and reinsurers are currently quite keen to take on longevity swap deals to offset the mortality risks that already exist in their portfolio and as a result these transactions are being priced attractively. This issue needs to considered carefully as there are many other issues that can influence attractiveness of the pricing of these contracts."

 

 

This article appeared in our January 2011 issue of The Actuary.
Click here to view this issue
Filed in
01

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Pensions Actuarial Analyst

London, Midlands, Scotland
£Market Competitive
Reference
143788

Senior Manager/Director level roles - Life insurance

Stirling
Generous salary with excellent bonus and benefits
Reference
143787

Reinsurance Pricing Actuary

London (Central)
£60-90K depending on experience
Reference
143786
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ