AXA UK Group Pension Scheme has executed a £3 billion longevity swap with Hannover Re, the first deal of its kind where over 95 percent of members covered were non-pensioners.
Willis Towers Watson was the sole adviser to the trade, which covered more than 16,000 AXA pension members. It removes the majority of the AXA scheme’s longevity risk, with the inclusion of non-pensioners giving AXA additional confidence in its investment strategy.
Shelly Beard, senior director for transactions at Willis Towers Watson and lead adviser, said: “Whilst pensioner longevity swaps have become relatively common place in the UK de-risking market since we led the first deal in 2009, this is the first whole of life longevity swap covering a material volume of non-pensioners and we expect significant appetite from other pension schemes to replicate the structure.”
Beard praised AXA and its trustees for their willingness to embrace innovation. “This is the third longevity swap we have partnered with the scheme on over the last six years,” said Beard. “The speed at which this transaction was completed, even with the additional structuring considerations from including non-pensioners, demonstrates that once an initial longevity swap has been completed, additional transactions can be completed quickly and efficiently.”
AXA, Willis Towers Watson, Hannover Re, Longevity swap