The Phoenix Group has concluded two longevity reinsurance transactions worth a total $2.4bn (€2.1bn) with Metropolitan Tower Life Insurance Company, a MetLife subsidiary.

The transactions were completed in the fourth quarter of 2021.

Jay Wang, senior vice-president and head of risk solutions for MetLife’s Retirement & Income Solutions business, said the transactions will help support Phoenix in its UK pension de-risking activity.

“Despite the continuing uncertainty around the pandemic, the UK pension and longevity risk transfer markets remains resilient, and we are excited to continue to grow our presence in this space,” Wang added.

Under the terms of agreement, Metropolitan will provide reinsurance to Phoenix for longevity risk associated with approximately $2.4bn of UK pension liabilities.

“MetLife’s financial strength and long history managing longevity risk helps direct insurers like Phoenix secure the retirement benefits of thousands of UK pensioners,” said Wang. “These deals represent another key milestone for our growing UK longevity reinsurance business, and we look forward to building on this important new relationship with Phoenix in the years to come,” Wang noted.

Kunal Sood, head of reinsurance and structuring at Phoenix Group, said: “MetLife brought together an outstanding team to deliver these reinsurance solutions in a short space of time.”

Sood added: “Our bulk purchase annuity (BPA) business continues to grow under the Standard Life brand as we seek to help companies de-risk and secure members’ benefits.”

Last week MetLife announced a $3.5bn longevity swap with Zurich and with Aon’s Risk Settlement Group for an unnamed UK pension scheme. 

Northern Bank completes two buy-ins with Aviva

The Northern Bank Pension Scheme has completed two buy-in transactions –the first worth £227m (€272m) and a second worth £30m – with Aviva Life.

Northern Bank Limited, which is part of Danske Bank, is a bank in Northern Ireland and growing in Great Britain, offering services to personal, business and corporate customers.

The two buy-in transactions were completed using an ‘umbrella contract’, according to Aviva. This will provide an efficient basis for future transactions.

Aviva will insure the defined benefit pension liabilities of 800 members in total, removing the investment and longevity risk of these members from the scheme, it said.

Members will experience no change in the amount of benefits they receive or the way in which they are paid as a result of the deal.

Lesley Bourke, chair of the scheme’s trustees, said: “These buy-in policies represent an important further step in the scheme’s journey to reduce investment risk and increase the security of members’ benefits.”

He said that Aviva was selected because of its ability to meet the trustees’ requirements and for the firm’s level of engagement and responsiveness to the trustees’ needs.

Ben Adams, partner at LCP, said: “It is unusual to complete two transactions in such quick succession and this really demonstrates how an umbrella contract structure can facilitate fast decisions and enable trustees to take advantage of attractive opportunities when they arise.”

Adams added that following completion of the first transaction the scheme trustees “were keen to lock in terms for a further tranche of benefits”.

The scheme trustee was independently advised throughout the process by LCP and Sackers. Aviva received legal support from DLA Piper.

Topics