Longevity transaction with Heineken UK

With life expectancy rising, pension schemes face the risk that they will not be able to meet all their commitments. Longevity transactions cover this risk by insuring the schemes’ liabilities in case their members live longer than expected. In 2015, we participated in four major longevity transactions. One of them concerned the pension plan of brewing firm Scottish & Newcastle, part of Heineken since 2008 and now called Heineken UK.

By completing a longevity swap transaction with Friends Life (now part of the Aviva Group), Heineken received longevity insurance for defined benefit liabilities of GBP 2.4 billion, covering around 19 000 pensioners. As the deal’s reinsurance partner, we assumed part of this risk from Aviva. Swiss Re is in a position to write such large deals because we have a natural offset through our mortality business, the capacity to write the business to our own balance sheet and the expertise to create tailor-made solutions.