Munich Re’s £1 Billion Longevity Swap with Willis Pension Scheme

Willis Towers Watson led the advice on the transactions, with Travers Smith LLP, Carey Olson (Guernsey) LLP, and Hengeler Mueller providing legal advice to the Trustees. Lincoln Pensions Limited advised on the reinsurer financial strength. Legal advice was provided to Munich Re by Sidley Austin LLP.

Global reinsurance giant Munich Re has completed a £1 billion longevity swap arrangement for 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 more directly access sources of reinsurance capital by using a cell captive as an insurance intermediating structure sitting between them and the reinsurer.

This longevity reinsurance transaction covers roughly 3,500 Scheme members, providing long-term protection for the Scheme against additional costs as a result of pensioners or their dependants living longer than expected.

The longevity risk was transferred to reinsurance firm Munich Re using a Guernsey based captive insurer that is fully owned by the Trustee of the Pension Scheme, established under Willis Towers Watson Guernsey ICC Limited, the brokers incorporated cell company structure.

Munich Re is a leading global provider of reinsurance, primary insurance and insurance-related risk solutions.

The Sidley team in London was led by partner Martin Membery (Picture) and included counsel James Phythian-Adams (Insurance), partners Jason Richardson (Global Finance) and Kolja Stehl (Financial Services Regulatory), associates Sean Renfer (Global Finance) and Hannie Syeda (Insurance), and trainee Parris Sammut (Insurance).

The Travers Smith cross-disciplinary team was led by Finance Partner, and a member of the firm’s Pensions Sector Group, Sebastian Reger with support from Associate Mike Fallow and trainee Tom Purkiss. Additional advice was provided by Head of Pensions Daniel Gerring and Senior Associate Chris Widdison.

The Carey Olsen team advising the Scheme’s trustees was led by partner Konrad Friedlaender, assisted by counsel Andrew Munro.

Involved fees earner: Konrad Friedlaender – Carey Olsen; Andrew Munro – Ogier LLP; Martin Membery – Sidley Austin LLP; James Phythian-Adams – Sidley Austin LLP; Sean Renfer – Sidley Austin LLP; Jason Richardson – Sidley Austin LLP; Kolja Stehl – Sidley Austin LLP;

Law Firms: Carey Olsen; Ogier LLP; Sidley Austin LLP;

Clients: Munich Re; Willis Pension Scheme trustees;