BT longevity swap points way for pass-through structures

More pension schemes could take on reinsurer counterparty risk

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BT longevity swap adds to structuring options

BT's pension fund announced on July 4 a longevity swap equalling the entire volume of transactions last year, but – unusually – there was no bank or insurer as intermediary on the deal.

Instead, the BT scheme transacted directly with Prudential Insurance Company of America as reinsurer, setting up a wholly owned insurance vehicle in Guernsey to make doing so possible.

"By using a wholly owned insurer, the trustee was able to access capacity in the global insurance and reinsurance market directly