RGA completes longevity transaction with Delta Lloyd
Reinsurance Group of America (RGA) has completed a transaction with Delta Lloyd Levensverzekering, the Dutch life insurance arm of the Delta Lloyd Group to mitigate longevity risk.
RGA will provide longevity risk protection and capital benefit on reserves of approximately €12 billion for a duration of six years.
The transaction is a liability replication derivative based on the Dutch population mortality results. It therefore does not directly reinsure the underlying business of Delta Lloyd, but it efficiently gives Delta Lloyd desired capital and risk management benefits.
"We are very pleased to announce this inventive, first-of-a-kind transaction in the EMEA region," said Johan Tuijp, managing director, RGA Netherlands and Nordics. "RGA's Dutch business team worked closely with our Global Financial Solutions team and the Delta Lloyd team to find the optimal solution to support Delta Lloyd's objectives."
Niek Hoek, chairman of the executive board, Delta Lloyd, said: "Delta Lloyd continues to explore further opportunities to manage its longevity risk efficiently through its capital management framework. This transaction provides us with medium-term protection against the rising costs associated with increases in life expectancy. Ultimately, it helps the Group maintain its ratings, meet obligations to customers and other creditors, and comply with current and anticipated regulatory requirements."
John Laughlin, executive vice president, global financial solutions, RGA, added: "This transaction is the latest example of RGA designing and implementing creative solutions for our clients to prepare for the upcoming capital requirements in Europe. RGA has again demonstrated its ability to develop highly efficient capital and risk management solutions to support our clients' evolving needs."
