Aegon gets longevity reinsurance for €7bn of pensions from RGA

Aegon gets longevity reinsurance for €7bn of pensions from RGA

Dutch headquartered life, pensions and annuities focused insurance provider Aegon has actually secured durability reinsurance to cover a EUR7 billion of pensions from Reinsurance Group of America (RGA). The business stated that the durability reinsurance deal enhances the threat profile of its Dutch service, while also maximizing capital at appealing terms, with these actions and others taken versus its Dutch pension company set to increase regular remittances for Aegon. Quarterly remittances are anticipated to increase from EUR25 million to EUR50 million per quarter since the first quarter of 2022.
The longevity reinsurance agreement will cover Aegon against the durability risk connected with EUR7 billion of pension liabilities, effective from December 31st 2021.
The lonegvity reinsurance protection will continue till the reinsured block of organization has actually run off completely, Aegon described and the transaction includes postponed pensioners along with in-payment policies of dependents and pensioners, which leads to a really long run-off period.
It covers Aegon versus the monetary impact of longevity risk over the full life of the policies at an attractive cost of capital, the company stated.
It follows a similar durability reinsurance structure carried out by Aegon in December 2019.
Integrated, almost 40% of the longevity threat direct exposure of the Dutch life company has now been mitigated for Aegon thanks to these reinsurance agreements.
” This durability reinsurance agreement is another bilateral action taken to take full advantage of the value of our Dutch Life business,” described Lard Friese, CEO of Aegon N.V. “In line with our method, this constructs on actions we have formerly taken to improve the threat profile of this service and is another step to generate stable, routine, and reliable cash streams from the Dutch Life business.”
Its expected to benefit Aegons Dutch Life company Solvency II ratio by around 15%-points, which equates to a roughly 5%-point increase in the Groups Solvency II ratio.
Running capital generation of will at first be decreased by EUR40 million per year and the IFRS running outcome will reduce by less than EUR15 million annually, Aegon said, with these effects to running capital generation and the operating outcome set to slow gradually, in line with the maturity of the reinsured portfolio.
Check out everything about this and lots of other transactions in our durability threat, swap and reinsurance transfer deal directory site.

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