Longevity Reinsurance

Background

As life expectancies lengthen, the amount of pension obligations for pension schemes and annuity insurers is growing. And, in today’s economic environment, hedging longevity risk (i.e., the chance that pensioners live longer than expected), particularly during periods of market volatility, is extremely challenging.

With these rising concerns, the demand for de-risking solutions continues to grow, and ways to mitigate risks associated with pension scheme obligations is top of mind. MetLife offers offshore reinsurance capabilities which can help pension scheme sponsors, and annuity insurers who execute pension buy-outs and buy-ins, reduce the cost and risk associated with managing pension related liabilities.

Our Solution

Uncertainty around longevity makes it challenging for scheme sponsors and annuity insurers to invest to meet future liabilities, especially when there is significant capital required to be held against these liabilities due to solvency requirements in certain instances. MetLife’s Longevity Reinsurance solution can enable pension scheme sponsors, and annuity insurers to offload longevity risk by tapping into MetLife’s deep expertise and a century of experience supporting the management of pension-related risks over a broad range of economic cycles. With a strong ability to hedge longevity risk in all market environments, we’ll work with you to develop a straightforward and seamless longevity reinsurance execution – backed by Metropolitan Tower Life Insurance Company's (“Met Tower Life”) strong balance sheet and market commitment – to ensure that long-term promises made to pensioners are honored.

How it Works

Through a bespoke arrangement, longevity reinsurance converts uncertain future pension payments into a fixed cashflow stream over time by locking in or covering the life expectancy of plan participants. An annual premium plus an annual fee is paid by the pension scheme sponsor or annuity insurer to Met Tower Life, serving as the reinsurer. In turn, Met Tower Life ensures certainty of the future pension payments which provides a stabilizing factor to scheme funding levels and reduces required capital.

Our Advantage 

MetLife Retirement & Income Solutions is here to help guide the far-reaching, consequential de-risking solutions that will impact pensioners for decades. We share your commitment of providing pension scheme members and policyholders with a guaranteed pension benefit.¹

Our actuarial, underwriting, risk, legal and operational expertise, coupled with our company’s active management of our diversified investment portfolio, enables us to customize the right solution for your unique needs.

MetLife has a 150-year history of developing innovative solutions, so you can feel confident about partnering with us. MetLife’s long history and experience in managing risk sets us apart.