SCOR announced today the completion of a £1.7 billion longevity reinsurance transaction covering the pensions of over 15,000 members of the Defined Benefit Section of the Balfour Beatty Pension Fund. The transaction protects the trustee of the scheme by transferring the risk that members live longer than expected.
The longevity swap with Balfour Beatty Pension Fund follows the £5.5 billion longevity swap transaction with Lloyds Bank No. 1 Pension Scheme announced in March earlier this year. Together, they demonstrate SCOR’s continued growth in the longevity risk transfer market and contribute to a record-breaking year for longevity volumes written by the Group.
Under the terms of the deal, SCOR will take on 100% of the longevity risk of the pensioners covered. Zurich UK will act as an intermediary insurer, adopting a “pass-through” structure that facilitates the risk transfer to SCOR as the reinsurer. SCOR was selected as the trustee’s preferred partner following a competitive tender from the entire longevity provider market, which was led by the trustee’s advisers Aon and CMS. SCOR was advised by global law firm Eversheds Sutherland.
Frieder Knüpling, SCOR, CEO Life & Health, said: “This transaction underlines SCOR’s strong appetite to deliver longevity solutions to our clients. Recent world events have brought life and health risks into sharp focus and now, more than ever, we are seeing demand for stability. We are pleased to be supporting the Balfour Beatty pension trustees in bringing additional security to their pension scheme members.”
Rupen Shah, SCOR, CEO Longevity & Financial Solutions, commented: “We are delighted with this record year of longevity volumes. An achievement made possible by a terrific team effort. Huge thanks also to the Balfour Beatty pension trustees, Zurich and all the advisers for the collaborative approach that helped to complete this significant transaction successfully. We remain committed to the pension de-risking market and look forward to supporting many more clients in the future.”
Greg Wenzerul, Zurich, Head of Longevity Risk Transfer, said: “Congratulations to those involved. We are delighted to add SCOR to the list of reinsurers with whom we have similar arrangements, and for the benefit of the Balfour Beatty pension trustees in this case. The continual success of the pension scheme longevity swap market demonstrates the availability and accessibility of such solutions for pension fund trustees looking to optimise their long-term de-risking plans.”
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