Hannover, 24 April 2013:
Hannover Re concluded two more block transactions for longevity risks in the United Kingdom and thereby reinsured additional pension obligations in the amount of around GBP 1 billion. Having already assumed longevity risks with a total volume of some GBP 2 billion from the British insurer Legal & General in February of this year, the company has now successfully completed two further transactions.
Hannover Re is assuming longevity risks from Abbey Life, a subsidiary of Deutsche Bank, in an amount of GBP 490 million, as well as from Rothesay Life totalling GBP 460 million.
"In our latest block transactions we serve as the exclusive reinsurer and have once again proven our expertise when it comes to reinsurance products in the field of longevity risks. In this context, as is also the case with Legal & General, we assume only the biometric – not the investment – risk", Chief Executive Officer Ulrich Wallin explained.
Altogether both deals will generate an initial gross premium in the order of GBP 53 million for 2013. Combined with the Legal & General transaction, this means that Hannover Re will be able to book some GBP 150 million in premium income for 2013.
Hannover Re has been active in the longevity risks segment since the mid-1990s. The risk covered in this business is that the life expectancy proves to be higher than anticipated.