Deutsche Bank Agrees 12bn Euro Longevity Swap with AEGON

20 February 2012 (PLANSPONSOREurope.com) - Deutsche Bank has agreed a 12bn euro longevity swap with AEGON.

The swap is targeted directly to the capital markets and on longevity transaction based on Dutch population data in Continental Europe.

The transaction is based on population data which is applied to a synthetic portfolio and will enable AEGON to hedge the liabilities on a portion of its annuity book. By distributing the risk of the trade in the capital markets, Deutsche will be able to manage the longevity risk taken on through the transaction while also offering investors access to a new, diversified asset class. Use of the capital market significantly increases the capacity for hedging longevity risk that already exists in the reinsurance market.

Clare Hennings, Head of Structured Insurance Solutions at Deutsche Bank, said: “Deutsche Bank continues to use its extensive experience in longevity risk management to address the complexities of the economic, regulatory and market environment faced by both our clients and investors. We believe this market will continue to grow as insurance companies and pension funds look at new ways to manage their liabilities while investors seek diversified investment opportunities.”
 

PLANSPONSOREurope Staff
editors@plansponsoreurope.com