MetLife reinsures $2.4bn of pension longevity risk for Phoenix Group

MetLife, Inc., one of the largest life and annuities insurance groups in the world, has provided reinsurance to cover $2.4 billion of pension fund related longevity risk for European pension and life consolidator Phoenix Group.

The $2.4 billion of longevity risk was transferred through two reinsurance arrangements to Metlife, which used its Metropolitan Tower Life Insurance Company subsidiary to enter into the arrangements.

“We are pleased to have completed our first two longevity reinsurance transactions with Phoenix and to support Phoenix in its U.K. pension de-risking activity,” explained Jay Wang, senior vice president and head of Risk Solutions for MetLife’s Retirement & Income Solutions business.

“Despite the continuing uncertainty around the pandemic, the U.K. pension and longevity risk transfer markets remains resilient, and we are excited to continue to grow our presence in this space.”

The longevity risk that has been reinsured is related to UK pension schemes that Phoenix had assumed risk from through its consolidator business.

MetLife’s financial strength and long history managing longevity risk helps direct insurers like Phoenix secure the retirement benefits of thousands of U.K. pensioners,” Wang said. “These deals represent another key milestone for our growing U.K. longevity reinsurance business, and we look forward to building on this important new relationship with Phoenix in the years to come.”

“MetLife brought together an outstanding team to deliver these reinsurance solutions in a short space of time,” added Kunal Sood, head of Reinsurance & Structuring at Phoenix Group. “We are delighted to have worked with MetLife as we commence this strong partnership. Our Bulk Purchase Annuity (BPA) business continues to grow under the Standard Life brand as we seek to help companies de-risk and secure members’ benefits.”

Both of these longevity reinsurance transactions were entered into in December 2021.

Metlife recently collaborated with insurer Zurich and Aon’s Risk Settlement Group to complete a US $3.5 billion transfer of longevity risk for a UK pension scheme, through an intermediated longevity swap and reinsurance arrangement.

The company has previously entered into numerous longevity risk transfer and reinsurance arrangements and features regularly in our Longevity Risk Transfer Deal Directory.