Dutch life and pension insurance company Achmea Pension & Life Insurance has completed an €8bn longevity reinsurance transaction.
The €8bn of pension liabilities were reinsured with Munich Re (€4bn) and Pacific Life Re (€4bn), and represented approximately half of Achmea Pension & Life Insurance’s longevity risk exposure.
These liabilities represented pensions in payment and deferred pensions, and included defined benefit group pension contracts, individual annuities, and individual pensions.
Aon provided Achmea Pension & Life Insurance with advice on reinsurance broking and structuring, while Hogan Lovells International LLP provided it with legal advice.
Macfarlanes LLP and NautaDutilh advised Munich Re and Debevoise & Plimpton LLP advised Pacific Life Re.
“Transferring roughly half of our longevity risk exposure is a deliberate and significant next step in executing our long-term strategy,” commented Achmea Pension & Life Insurance chief executive officer, Arthur van der Wal.
“The associated capital benefit will support our strategic growth ambitions in the area of pension buyouts, as well as the further optimisation of our investment portfolio. This will be done in close collaboration with Sixth Street and Achmea Investment Management.”
Aon senior partner and UK head of risk settlement, Martin Bird, said: “The global longevity reinsurance market remains highly competitive and has large scale capacity to deploy, with a strong appetite in relation to the Dutch market.
“By using Aon’s Demographic Horizons software for modelling mortality and other demographics - including the leading base mortality postcode model for the Netherlands - as well as our broader reinsurance market insight and broking expertise, we were able to syndicate this milestone transaction for Achmea.”
Pacific Life Re managing director, savings & retirement for Europe & Americas, Vanessa HoVon, said the firm was excited to support Achmea on the transaction, which was Pacific Life Re's largest to date in the Netherlands.
Munich Re head of longevity, Martin Lockwood, added that the longevity reinsurance market was “increasingly complex and dynamic”.
“This transaction marks a significant milestone in our ongoing commitment to support Dutch insurers in safeguarding retirement benefits for thousands of policyholders,” he said.
“Munich Re is also grateful for the effort and expertise offered by Macfarlanes and NautaDutilh in supporting this transaction.”
