Learning from the
Dutch longevity
risk transfer market
Learning from the
Dutch longevity risk transfer market
André de Vries
Vice President Business Development, EMEA Global Financial Solutions
Longevity swaps have become increasingly common since they were first executed in the U.K. more than 15 years ago. Most transactions are still executed in the U.K., but several other countries now also have growing longevity risk transfer markets.
One of these countries is the Netherlands, where insurers have accumulated sizeable portfolios of pension obligations that are subject to longevity risk.
In a recent article for the RGA Knowledge Center, André de Vries, Vice President, Business Development, EMEA, Global Financial Solutions, explores some recent developments in the Dutch longevity risk transfer market. Read the full article to learn more about:
- The shift from longevity derivatives to longevity reinsurance, in part due to the introduction of explicit Solvency Capital Requirements in EU regulation in 2016, resulting in clear capital relief from longevity risk transfer transactions
- The incorporation of recouponing as an adjustment mechanism in order to provide additional credit risk protection
- The accommodation of a bail-in, whereby the insurer’s pension obligations might be reduced in order to recapitalize the insurer or facilitate a transfer of the underlying liabilities to another insurer
- An increased interest in extending longevity risk transfer with asset performance risk, referred to as asset-intensive reinsurance, driven by the potential increase in pension buy-outs resulting from upcoming new Dutch pension regulations
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