Life insurance, important deal between Munich Re, SCOR, Swiss Re and Aviva

Magazine Issue:

Insurance in the Gulf between shadow and light [3]

Magazine date:

Apr 2014

Aviva has signed an agreement with Munich Re, Swiss Re and Scor pertaining to the transfer of lifespan extension risk for the 19 000 employees registered in its retirement portfolio. Amounting to over 6 billion EUR (8.2 billion USD) this transaction, called swap and in force as of last January first, is the largest signed between an insurer and reinsurers.

Image provided by Fotolia. Used with permission from Microsoft Office Swiss Re, active in the class of longevity risk since 2007, has concluded eight similar agreements . II is the sixth operation for Scor which aims at doubling its turnover in this area over the next three years.

Longer life expectancy raises a problem for pension funds and insurers who have difficulties in honoring their commitments. The transfer of this risk to reinsurers appears to be one of the options available for a way out.