Global reinsurer SCOR has participated in a £1.7bn longevity swap transaction with Balfour Beatty Pension Pension Trust, with Zurich UK acting as an intermediary insurer, leveraging a “pass-through” structure that facilitates the risk transfer to SCOR as the reinsurance provider.
This longevity swap and reinsurance deal, said the firm, will cover the pensions of over 15,000 members of the defined benefit section of the Balfour Beatty Pension Fund.
This transaction follows the £5.5bn longevity swap transaction with Lloyds Bank No. 1 Pension Scheme announced in March earlier this year. Under the terms of this new deal, SCOR will take on 100% of the longevity risk of the pensioners covered.
Frieder Knüpling, CEO of life and health at SCOR, 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.”
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. Zurich UK will act as an intermediary insurer, adopting a ‘pass-through’ structure that facilitates the risk transfer to SCOR as the reinsurer.
Greg Wenzerul, head of longevity risk transfer at Zurich, 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.”
