Introduction
Pension longevity swaps allow pension fund Trustees to manage and mitigate the longevity risk faced by the pension scheme in a transparent, flexible, scalable, and cost efficient way, utilising Incorporated Cell Companies.
Pension fund Trustees have an obligation to manage and mitigate the risks faced by the pension scheme. One of the risks that has been increasing in recent years is longevity as people are living longer due to factors such as medical advances and more health-conscious lifestyles.
Longevity swaps have been around since 2008 but tended to be transacted with insurers or banks who then mitigated their risk through the purchase of insurance/reinsurance which inevitably added cost and complexity.
The reinsurance market remains competitive but the reinsurers themselves are only able to deal with regulated insurance companies and not directly with pension schemes. This has led to the formation of Incorporated Cells to enter longevity swaps.
Advantages
Ability to continue to manage investments even when they are collateralised;
Transparency of structure;
More control and governance than a conventional swap or buy in/out;
Structure is scalable such that further swaps can take place in the future; and
Swap can be novated as part of a buy in/out strategy in the future.
There are two options for pension Trustees:
Set up an Incorporated Cell in a third-party ICC (such as Robus Insurance (Guernsey) ICC Limited); or
Set up an Incorporated Cell Company and then form Incorporated Cells for longevity swap transactions, which allows the pension Trustees to choose the Directors appointed.
You can download our flyer on pension longevity swaps here, but we’d prefer to talk to you to understand your business and provide tailored advice.
Meet the Team: Pensions experts working with Robus Guernsey
Robus have pulled together a team of experienced professionals from across the industry to bring the best to our clients looking for pensions de-risking solutions.
Drawing together actuarial, pension trustee, legal, captive and insurance management expertise the Robus, and our Longevity Consultants, are focused on delivering value for our clients. Please get in touch with Adele if you want to find out more.
Find out about Robus’ pension longevity consultants below:
Adele Gale
Adele is the Head of Longevity for Robus and Director of Robus Guernsey. Adele is a Fellow of the Institute of Chartered Accountants and acts as Client Lead on a range of clients with a particular interest in compliance, risk management and governance.
Over 13 years in insurance management, Adele’s experience includes managing captives across various industry sectors, special purpose insurers, parametric commercial insurers and rated reinsurers. Adele is chairman of the Guernsey International Insurance Association and is passionate about reducing the impact of insurers on climate and people.
Frank Oldham
Frank is a professional trustee, qualified actuary and Client Director at ITS limited, with over 35 years of experience as a pensions professional, experienced in delivering longevity transactions from both sides, as trustee and advisor.
His current portfolio represents circa £25bn in assets and includes trustee for the DB consolidator Clara as well as being an Independent NED for a reinsurer of bulk annuities. Formerly a Senior Partner at Mercer, Frank was one of its most experienced scheme actuaries. He previously held positions of UK Retirement Business Leader and Global Leader of DB Risk Consulting and Solutions. Additionally, he has performed advisory roles to trustee boards and corporate sponsors of FTSE 100 companies.
Kate Storey
Independent Non-Executive Director and Consultant in the insurance and investment sectors. Guernsey Advocate and former Partner at two leading Guernsey law firms. 2017 Global Law Experts Annual Awards - Insurance & Reinsurance Lawyer of the Year in Guernsey.
Kate is a previous winner of the Corporate INTL Magazine Global Awards – Insurance & Reinsurance Lawyer of the Year in Guernsey and was named as one of 85 most successful female executives in the risk transfer industry globally in Intelligent Insurer magazine’s Class of 2017 Influential Women in Re/Insurance. Additionally, Kate is ranked as a "Leading Individual" for Insurance by Legal 500 and is ranked by Chambers & Partners.
Kate has been involved with the majority of completed longevity swaps executed in Guernsey to date.
Adele Gale FCA, BSc (Hons)
Adele is a Fellow of the Institute of Chartered Accountants and leads the ILS and Longevity practices at Robus. With over 10 years insurance management experience, Adele was involved with setting up Guernsey's first rated catastrophe reinsurer, first cat bond listing and first securitisation of takaful insurance policies as well managing over a hundred special purpose insurers. Adele also serves as the Deputy Chairman of the Guernsey International Insurance Association (“GIIA”).
(Guernsey)
Key Contact
For more information about Robus’ longevity capabilities please contact Adele Gale:
ADELE GALE | Deputy Managing Director & Group Head of ILS
T +44 (0)1481 742559 E adele.gale@robusgroup.com
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