RGA completes €12 billion Delta Lloyd longevity deal
Reinsurance Group of America (RGA) has completed an agreement to provide additional longevity risk protection and capital benefit on reserves of around €12 billion to Delta Lloyd.
Delta Lloyd is the Dutch life insurance arm of the Delta Lloyd Group.
The transaction, with a duration of eight years, is a liability replication derivative based on the Dutch population mortality results.
Paul Sauvé, senior vice president, global financial solutions, Europe Middle East and Afric (EMEA) at RGA, said: “This marks RGA’s second transaction with Delta Lloyd to mitigate a portion of Delta Lloyd’s longevity risk. We see considerable interest in the EMEA region for proven solutions that address the new capital requirements framework and are actively talking to our clients about how such liability replication strategies can be applied to similar opportunities.”
Hans van der Noordaa, executive board chairman, Delta Lloyd, added: “This is the second time Delta Lloyd has transferred a part of its longevity exposure to the reinsurance market. Both transactions, the first one was in 2014, are part of our sound and efficient capital management.
“We continuously investigate options to optimise our capital structure and strengthen our balance sheet, through our product mix, underwriting, asset optimisation and transactions, such as announced today.”
David Boettcher, executive vice president and chief operating officer, global financial solutions, RGA, said that the transaction demonstrates RGA’s ability to implement creative and effective solutions for its clients under changing regulatory environments.
“By applying our extensive knowledge of biometric risk, we are able to offer efficient, flexible solutions that integrate with our clients’ capital models for Solvency II as well as address the requirements of other principles-based solvency regimes and frameworks around the globe, such as SAM (in South Africa), C-ROSS (in China), and SST (in Switzerland),” he said.
