Hannover Re Assumes UK Pension Liabilities Worth GBP1.6 Billion

By Ulrike Dauer

FRANKFURT--German reinsurer Hannover Re SE (HNR1.XE) Tuesday said it is assuming the longevity risks of a portfolio of U.K. pension liabilities, which will add some 1.9 billion euros ($2.59 billion) in premium revenues to group earnings.

The portfolio consists of 1.6 billion pounds ($2.69 billion) in U.K. pension liabilities of French Total SA (FP.FR) that are insured by primary insurer Pension Insurance Corp. It will add EUR1.9 billion to Hannover Re's gross premium revenues overall, the reinsurer said. Hannover Re expects 2014 revenues of at least EUR14 billion, of which around EUR43 million will be contributed by the U.K. pension portfolio.

As with similar previous transactions, Hannover Re will only manage the biometric risk of the portfolio for which it will receive a fee, while PIC will assume the investment risk, Hannover Re said.

Including the current transaction, Hannover Re has underwritten block transaction deals for pension liabilities that add EUR12 billion to premium revenues overall, a company spokeswoman said. It expects more such transactions, as companies will increasingly look for ways to limit their pension liabilities, said Chief Executive Ulrich Wallin.

In its block transactions for pension funds, Hannover Re concentrates primarily on blue-collar workers.

Write to Ulrike Dauer at [e-mail]; Twitter: @UlrikeDauer_

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