MetLife enters UK longevity reinsurance market with PIC transaction

Metlife, Inc., one of the largest life and annuities insurance groups in the world, has entered the longevity reinsurance market in the United Kingdom, providing a longevity risk transfer arrangement for regular market participant Pension Insurance Corporation plc (PIC).

Metlife entered into the longevity reinsurance arrangement using its susbidiary Metropolitan Tower Life Insurance Company.

Metropolitan Tower Life Insurance Company has entered into a reinsurance agreement to cover the longevity risk associated with roughly £280 million of pension liabilities for PIC.

“This transaction marks an important milestone in MetLife’s strategy and gives us the opportunity to apply our experience managing risk to a new market,” explained Graham Cox, executive vice president and head of Retirement & Income Solutions at MetLife.

“With this transaction, MetLife is establishing itself as a reinsurance solution for direct insurers in the U.K. While this is MetLife’s initial step into the U.K. longevity reinsurance market, our long history and mortality expertise position us well for the future,” he continued.

“It’s great to see another well-rated, global corporation complete a debut transaction within the U.K. bulk annuity market,” added Khurram Khan, Head of Longevity Risk at PIC. “This is a positive development for both PIC and for market capacity as a whole.”

“In 2019, there were more than £40 billion of U.K. pension risk transfer transactions completed — this robust market presents an opportunity for reinsurers to support direct insurers by managing their longevity risk,” Cox said. “We are pleased to be working with PIC and look forward to building on this relationship.”

The UK longevity reinsurance market and the market for longevity swaps and other pension risk transfer arrangements has been the most active in the world in recent years.

For pension consolidators such as PIC, having a wide-range of longevity reinsurance capacity providers is key and the addition of Metlife expands the availability of much needed capacity to help these pension obligation focused insurers continue to assume more risk.

Read about many historical longevity swap and reinsurance transactions in our Longevity Risk Transfer Deal Directory.