Guernsey has seen a surge of pension longevity risk transfer deals over the past 18 months which have continued through Covid-19 uncertainty. In the last five years, a number of pension schemes of well-known companies have completed transactions, together worth in excess of £30 billion, through captive insurers based in Guernsey.
Three deals were conducted in 2020, with a combined scheme value of more than £8 billion, representing a bumper year in the longevity space for Guernsey, with more transactions in the pipeline. All solutions offered through Guernsey use an incorporated cell of a Guernsey incorporated cell company.
Kate Storey, Partner at law firm Walkers and Chair of the Guernsey industry pensions de-risking group, said: “Guernsey is the market leading jurisdiction globally for captive solutions to hedge pension schemes’ longevity risk, having been host to substantially more transactions of this type than any other jurisdiction and with an established track record dating back to the first deal in 2014.”
“The first deal we saw completed through Guernsey is still the biggest, for British Telecom in 2014 at a value of £16 billion,” said Guernsey lawyer Christopher Anderson, Partner at Carey Olsen, the law firm which has advised on all the completed deals so far.
“This certainly opened eyes to the possibilities of pension longevity risk transfer in this way. It’s fair to say the market just ticked over for the next few years, but we have seen a lot of activity in the past 18 months with plenty more discussions in the pipeline.
“Guernsey has a lot to offer this specific market, from our highly-regarded regulatory regime through to our long history in cell company and captive insurance innovation, which has in turn created a centre of excellence for handing these types of complex transactions.”
Guernsey will highlight its offering in this area at the upcoming Westminster and City 18th Annual Conference on Bulk Annuities from 28-29 April. This year’s theme is ‘Sustaining Momentum in Volatile Times’, and a Guernsey delegation will be present at the online event to discuss solutions and services on offer in the island. For more information, visit our event website: https://www.weareguernsey.com/finance-events/2021/the-18th-annual-conference-on-bulk-annuities/.