Unrealistic pricing expectations impede development of longevity swap market

Price expectations have played a crucial role for the relatively small number of longevity swap deals that have so far been completed

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The development of the longevity swap market is being held back by the unrealistic pricing expectations held by advisers and their pension trustee clients, according to Simon Gadd, head of annuities at London-based Legal & General.

Despite a barrage of publicity when Babcock signed the first longevity swap deal in 2009, only another five transactions between pension schemes and banks or reinsurers have been performed to date. The most recent deal was between Airways Pension Scheme, one of

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