Aegon ties up £9bn swap deal with Deutsche Bank

Clare Hennings, head of structured insurance solutions for Deutsche Bank, said the swap would enable Aegon to hedge the liabilities of a portion of its annuity book.

She said it was the first longevity transaction based on population data in continental Europe.

Ms Hennings added: “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.”

The statement by the bank said: “By distributing the risk of the trade in the capital markets, Deutsche Bank is 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.”

David Trenner, technical director for Glasgow-based Intelligent Pensions, said: “It is interesting in terms of Solvency II, as that is about making sure the annuity book is properly preserved.”