Achmea and Longevity Reinsurance Agreements with Munich Re and Pacific Life Re
Achmea Pension & Life Insurance recently concluded two major longevity reinsurance agreements with Munich Re and Pacific Life Re, impacting approximately €8 billion in pension liabilities. These agreements, which involve about half of Achmea's longevity risk exposure, were orchestrated with expert advice from Aon and several top-tier legal firms. Importantly, the agreements maintain all existing services and guarantees for policyholders.
The company, a significant player in the Dutch insurance market, serves over 2.1 million customers. Formed initially as a joint venture between Achmea and Sixth Street last year, Achmea is strategically transferring a substantial portion of its longevity risk. This move aligns with its goals to advance in pension buyouts and enhance its investment portfolio performance.
Strategic Vision and Expansion
Arthur van der Wal, CEO of Achmea Pension & Life Insurance, noted the transactions' strategic importance: “Transferring roughly half of our longevity risk exposure is a deliberate and significant next step in executing our long-term strategy. The associated capital benefit will support our strategic growth ambitions in the area of pension buyouts, as well as the further optimisation of our investment portfolio.”
Aon's role in this deal was critical, with reinsurance broking and structuring led by Roelant de Haas in the Netherlands and Martin Bird in the UK. Achmea received legal counsel from Hogan Lovells, while Macfarlanes and NautaDutilh advised Munich Re, and Pacific Life Re was advised by Debevoise & Plimpton.
Roelant de Haas, CEO of Aon Reinsurance Solutions Netherlands, emphasized the success of this strategic capital solution: “We are pleased to have supported Achmea on this strategically important capital solution and to have brought together a united Aon team with in-depth market expertise, industry insights and strong broking capabilities to deliver a successful transaction.”
Market Competition and Capacity
Martin Bird, Senior Partner at Aon, highlighted the competitive nature of the global longevity reinsurance market, which remains robust and capable of large deployments. He remarked on Aon’s capability in using advanced software for modeling mortality and demographics, which was crucial in syndicating this milestone transaction for Achmea. Michiel Dijkstra, Head of Balance Sheet Management at Achmea, commended the collaboration with Aon, noting their expert leverage of Dutch market knowledge to conclude the transaction successfully.