The pension fund of professional services group Marsh & McLennan Companies (MMC) has hedged £3.4bn (€3.8bn) of liabilities against increases in member longevity.The deal is thought to be the third-largest longevity risk transfer for a UK pension fund, and the second largest using a captive structure.In MMC’s case, the trustees established a wholly owned insurance company on a Marsh captive platform with its own independent board of directors. Marsh is the world’s largest captive insurer, according to the company.Canada Life Reinsurance and Prudential Financial were the reinsurers, each covering half of the liabilities. These were the liabilities associated with around 7,500 members. Mercer, which is owned by MMC, acted as adviser. Source: Credit – Steve JohnsonGuernsey is a top growth domicile for captive insurersLongevity swap pricing has come down over the past 12 months and other large transactions are expected to be completed this year.Ian Aley, head of transactions at Willis Towers Watson, said: “Despite the current debate regarding whether recent heavier-than-expected mortality should delay activity to manage longevity risk, we are advising many schemes for whom a longevity swap is a key next step on their risk management journey, and who are taking advantage of the fall in longevity swap pricing over the last 12 months.”The MMC transaction is at least the second this year to use a captive insurer. Earlier this week IPE revealed that one of British Airways’ defined benefit pension schemes also created its own insurer for the purposes of a longevity risk transfer, which covered £1.6bn of liabilities.The structure was pioneered by the BT Pension Scheme in 2014, for a £16bn hedge. A few months later the Merchant Navy Officers’ Pension Fund also used a captive structure for a £1.5bn deal.The pension schemes of Aviva and AXA UK have completed relatively large longevity swaps with internal insurers, but these were not captive structures given that insurance is their sponsors’ business. The MMC pension fund has roughly £7.5bn of assets, according to IPE’s Top 1000 Pension Funds survey.Using a captive insurer avoids paying an upfront premium, Prudential said.William McCloskey, head of international longevity transactions at Prudential, said: “This significant transaction highlights the importance of the captive solution in longevity risk transfer and proves the captive remains an important option for trustees to efficiently and cost effectively transfer longevity risk in the manner that works the best for them.”
Hull have signed Scotland international Robert Snodgrass from Norwich on a three-year deal. Press Association The clubs agreed a fee for the 26-year-old on Thursday, understood to be a one-off payment of £7million, and personal terms have now been settled on the winger’s switch to the KC Stadium. It is the second major signing of the close season for the Tigers, who last week bought former loanee Jake Livermore from Tottenham for a club-record fee rising to £8million. Like Livermore, Snodgrass fits manager Steve Bruce’s preferred profile of players with Premier League experience, a model he enjoyed success with in Hull’s first season back in the top flight. Snodgrass had a year left on his contract at Carrow Road but was eager to avoid dropping down a division following last season’s relegation. Sunderland and Stoke had been linked with a move for the player, but are thought to have been put off by a price tag Hull were willing to meet. He made 34 appearances in 2013-14, scoring seven times. Speaking after putting pen to paper, Snodgrass told www.hullcitytigers.com: “Having spoken to the owners and the manager here, and having seen the plans they have for this club, I was very keen to be a part of it all. “Once the fee was agreed between the two clubs, it all happened very quickly and everything the club has done to get the deal completed has been unbelievable. “This is the start of an exciting new chapter for me and for my family and I just can’t wait to get started now.” Hull, who have the added commitment of Europa League football following their FA Cup final appearance in May, have also been linked with a move for Bristol Rovers teenager Alefe Santos. The Conference side tweeted that the 19-year-old Brazil-born midfielder had turned down a new contract and mentioned Hull as a possible destination, but the Tigers are not understood to have made a formal offer to Santos. “Alefe Santos has decided not to sign a new deal with Bristol Rovers. We understand that Santos is in talks with Hull City. Any fee for Santos will have to be determined by tribunal,” Rovers wrote.