Author: Aaron Woolner

UK bank Nationwide’s pension fund has conducted a £1.7bn ($2.1bn) longevity swap with Zurich UK and Prudential Financial covering the risk of roughly 7000 members. The transaction transfers the longevity risk of approximately £1.7bn of pension scheme liabilities covering approximately 7,000 members. The transaction has been structured so that the longevity risk of the pension scheme relating to these members will be passed through to Zurich UK, to an insurance subsidiary of Prudential Financial as the reinsurer, with a limited recourse mechanism protecting Zurich UK against exposure under the transaction. Aon was the lead adviser to the Nationwide Pension Fund…

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The MGM Assurance Staff Pension Plan has conducted an £80 million Bulk Purchase Annuity transaction with Standard Life, part of the UK’s largest long-term savings provider, Phoenix. The deal was completed in early March and covers 700 members of the pension scheme for staff of the now defunct The Marine and General Mutual Life Assurance Society, which was dissolved in 2018 following the transfer of its business to Scottish Friendly in 2015. The deal with MGM follows a strong year for Standard Life’s pension risk transfer business after it recorded £4.8bn of Bulk Purchase Annuity premiums in 2022. XPS Pensions…

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As artificial intelligence (AI) becomes more high profile, insurance practitioners are taking note of the potential for the technology, but also the potential for AI bias. Insurance regulators have been concerned about the dangers posed by AI for some time. In January 2019 the New York Department of Financial Service (NYDFS) put out a circular on the: ‘Use of External Consumer Data and Information Sources in Underwriting for Life Insurance’. The circular was issued following a departmental investigation which highlighted two major problems with insurers using AI to collate external data sources for their underwriting process: the potential for unlawful…

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The Harrods Group Pension Plan has signed a £400m ($635m) full scheme buy-in with insurer, Scottish Widows. The deal which secures retirement benefits for roughly 1,900 pensioners and 2,100 deferred members and comes as rising interest rates impact on pension schemes funding levels has driven activity in the pension risk transfer market to record highs. The Harrod’s trustee chair said that the deal was the culmination of a long-term strategy which has seen the scheme take a long term, low risk approach to investment risk. The chair added that by moving to a full buy-in the Harrods Pension Scheme had…

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The trustees of the pension scheme for the UK arm of Dutch insurer Aegon have signed a partial buy-in deal with Scottish Widows – the first of two such deals in June for the Edinburgh-headquartered insurer. Aegon UK Staff Retirement and Death Benefit Scheme has completed a £160m ($199m) partial buy-in with Scottish Widows, which will cover a certain number of risks: interest rate, inflation and longevity. UK pension schemes with liability driven investment strategies faced serious distress in October last year when gilt yields soared following a poorly received budget by the UK’s finance minister. In a press release…

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Legal & General Retirement America and Reinsurance Group of America (RGA) teamed up to strike a $309m pension risk transfer (PRT) deal with Fortune 500 firm PPG. Pittsburgh-based PPG is a paint manufacturer and the deal inked with the two insurers covers over 4,000 retirees and beneficiaries of the firm’s defined benefit pension plan. Post transfer LGRA will be the plan’s lead administrator and therefore fully responsible for the service and administration of all participants it now covers. In a press release RGA described the deal as the continuation of a decades long partnership between the two groups, with RGA…

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The pension scheme of British and Irish retailer, Timpson Group, has completed a £100m full scheme buy-in with Just Group, covering the retirement benefits for 369 pensioners and nearly 7000 deferred members. The deal was conducted at a hectic pace and was completed in just under eight weeks, a timeframe which according to K3 Advisory, which led the deal, was the result of excellent data and record keeping by the pension scheme. In addition to K3 Advisory, Western Pension Solutions (WPS) advised Timpsons. Legal advice was provided to the trustee by Gateley, while XPS acted as the administrator and investment…

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Defined benefit (DB) pension schemes attached to FTSE 350 companies saw their time to buy-out slip below five years for the first time since according to a gauge by consultant Barnett Waddingham. According to the Barnett Waddingham End Gauge, the average time to buyout for firms on the UK index stood at 4.7 years in Q1 2023. The index did highlight a slight blip in January when time to buy-out stretched to 5.5 years on a fall in bond yields but overall the trajectory has been downwards in the first quarter of 2023. The news carries on the positive momentum…

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Aviva has struck a deal with the trustees of the Thomas Cook pension plan, for a £900 bulk annuity buy-in which will cover 12,500 pension scheme members of the UK travel agent which went bust in 2019. According to a press release the UK insurer said that as a result of the deal the majority of members were now insured to a better level than if the benefits were instead disbursed by the UK’s Pension Protection Fund (PPF) which is the provider of last resort when pension plan sponsors hit financial difficulties. Jamie Cole, Head of Bulk Purchase Origination at…

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UK supermarket Safeway has fully derisked its pension scheme after completing a £1.4bn ($1.75bn) buy-in transaction with insurer Rothesay Life. The Safeway Pension Scheme is sponsored by UK retailer WM Morrisons and the latest deal means that the future pension benefits of nearly 23,00 members — comprising 7,200 pensioners and dependants, plus over 15,000 deferred members —are now fully insured. This is the second buy-in deal between the two parties and means that Rothesay, which touts itself as the UK’s largest specialist pension insurer, has derisked a total of £2.1bn of the retailer’s pension liabilities. Stephen Caine, Manchester-based director at…

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