Increasing demand for global longevity reinsurance could lead to higher bulk annuity prices but less exact matching for longevity hedging, says Mercer.
With increasing insurance of longevity risk from pensions and general life providers in the Netherlands, Canada, the USA, and the UK, within five to ten years there may be a mismatch in supply and demand....
Schemes are increasingly looking at longevity hedging as part of their de-risking process, according to a survey by Insight Investment.
Insurers are now able to accommodate up to £30bn of bulk annuity transactions every year with no impact on pricing, according to Lane Clark & Peacock (LCP).
The Electricity North West Group of the Electricity Supply Pension Scheme (ESPS) has invested in an £805m pensioner buy-in with Scottish Widows.
Zurich has agreed to insure £800m of longevity risk for the pensioners of a FTSE 100-sponsored pension scheme.
The ESAB Group (UK) Limited Pension & Life Assurance Scheme has purchased a £255m full buy-in with Rothesay Life, covering benefits for all 900 members of the scheme.