Hannover, 10 June 2014:
Hannover Re has concluded another block transaction for longevity risks. Pension liabilities of altogether GBP 1.6 billion (EUR 2 billion) assumed in cooperation with the UK-based Pension Insurance Corporation have for the most part been transferred to Hannover Re. As with previous transactions in the longevity sector, Hannover Re assumes only the biometric risk, not the investment risk.
The company will generate total premium income of around EUR 1.9 billion from this transaction. Gross premium of EUR 43 million is anticipated for the 2014 financial year.
"We expect to see further attractive opportunities in longevity business because it is likely that companies will increasingly look for ways of limiting their pension liabilities", Chief Executive Officer Ulrich Wallin noted.
Hannover Re has been active in the area of longevity risks since the mid-1990s. Longevity swaps hedge the risk that the life expectancy may prove to be higher than anticipated. In its block transactions for pension funds Hannover Re concentrates primarily on the blue-collar workers' segment.