Hannover Re places swap for extreme mortality risks

German reinsurer Hannover Re has used the capital markets to place a swap for extreme mortality scenarios.

The multi-year protection cover hedges life insurance risks against a severe increase in mortality rates – resulting, for example, from pandemics – in the UK, Australia and the US.

The company said that altogether, a volume of some $160 million has now been placed in the past two years.

The index-linked swap, which was structured and placed by Hannover Re, was taken up primarily by institutional investors.

"With this transaction we have developed a customised concept designed to counter the impacts of a significant increase in mortality rates," said Ulrich Wallin, chief executive of Hannover Re.