NN Group in €13.5bn longevity risk deal with Munich Re, Swiss Re and Canada Life

Dutch insurer NN Group's subsidiary NN Life has completed three longevity risk reinsurance transactions with Munich Re, Swiss Re and Canada Life, covering €13.5 billion of pension liabilities in the Netherlands.

The transactions aim to reduce NN Group's exposure to longevity risk, as well as reduce the required capital and further strengthen its capital position.

These transactions cover the risks associated with the policies of over 200,000 pensioners and dependants.

Canada Life Reinsurance covered €5.3 billion of in-force liabilities for nearly 82,000 of in-payment defined benefit pensioners.

The risk transfer is effective as of 1 January 2020, and the reinsurance agreements will continue until the portfolio has run off.

David Knibbe, CEO NN Group, said: “These transactions to transfer a part of our longevity exposure are part of our pro-active risk and capital management approach. We continuously investigate options to optimise our capital structure and to further strengthen our balance sheet, through our product mix, underwriting, asset optimisation and risk transfers.”

"We intend to use the strengthened capital position to improve the capital generation profile of NN Life over time and increase the level of its remittances to NN Group as from the second quarter of this year," said the company.

Jeff Poulin, global head of Canada Life Reinsurance, said: "I'm pleased that despite a significantly altered work environment due to Covid-19, Canada Life Reinsurance and NN Life's teams worked together to complete this major transaction. It will allow us to further expand and diversify our global longevity business in 2020 and beyond."

Derek Popkes, chief operating officer at Canada Life Reinsurance, added: "Canada Life Reinsurance remains focused on delivering for our clients in these challenging times. We look forward to a long and mutually beneficial relationship with NN Life. Our commitment to the Dutch market and our strong financials make us a good partner in the Netherlands."