Bedell Cristin advises Munich Re

Posted: 14/07/2020

Richard-SharpBedell Cristin has advised Munich Re on a £1bn longevity swap arrangement with the Willis Pension Scheme, in a longevity hedging deal that covers some 3,500 pension scheme members.

The transaction was undertaken using the Longevity Direct solution offered by Willis Towers Watson, which enables pensions to access more directly sources of reinsurance capital by using a cell captive as an insurance intermediating structure sitting between them and the reinsurer.
 
The £1bn longevity hedging deal transfers the risk of pensions in payment, offering long-term protection against additional costs that arise because pensioners or their dependents live longer than expected.
 
The longevity risk was transferred to reinsurer Munich Re using a Guernsey-based captive insurer fully owned by the trustee of the pension scheme, established under Willis Towers Watson Guernsey ICC, the broker's incorporated cell company structure.
 
The 'ready made' incorporated cell company enables efficient and more direct access to the reinsurance market, without the need for a third-party insurance carrier to intermediate the deal.

The Bedell Cristin team was led by Partner Richard Sharp (pictured), who worked alongside Sidley Austin.


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