Longevity/Mortality team of the Year, Hymans Robertson
Hymans Robertson had a strong year in 2019, with the launch of the Club Vita US business, as well as keeping clients and the industry up to speed with thought leadership. Examples of this include the publication of the second edition of its Longevity Risk book and the consultancy's mortality benchmarking survey.
The judges felt taking the Club Vita model, which underpins much of Hymans Robertson's longevity expertise, to the US and rolling out in that market was a bold and significant achievement.
The launch included the opening of a New York office in June last year together with a US website. Club Vita welcomed it first US client in July and has launched a Zip + 4 code longevity model, which provides clients with detail on geographical differences in life expectancy.
To support the increased market demand for transferring deferred longevity risk to insurers, Hymans Robertson also officially launched VitaExchange last year, a non-pensioner research programme to enable re/insurers to deliver solutions to this growing market.
The insurance consultancy's support to the longevity risk transfer market also continued in 2019, and it claims to have advised 80% of life reinsurers and 85% of bulk annuity writers.
Commenting on the main longevity and mortality trends affecting re/insurers, Andrew Gaches, head of longevity, life and financial services at Hymans Robertson, says 2019 was a reminder that longevity rates are volatile.
Gaches says: "Low deaths in Q1 implied we may see very rapid improvements over the year, but in the end, this was partially mitigated by unusually high deaths in Q4. However, this has served as a reminder to those holding unhedged longevity risk (principally pension schemes) of the value of the insurance market."
In terms of what growth to expect in the UK longevity risk transfer sector, Gaches says 2019 was an exceptional year, with around £40bn of defined benefit liabilities moving to the insurance market, with around half of that from just five huge bulk purchase annuity (BPA) transactions.
He says: "2020 is unlikely to see the same volume of BPA business, but longevity swaps, of which there were relatively few in 2019, may bump up the total longevity risk transferred to a comparable magnitude. The long-term outlook is strong too, with de-risking being the key strategic direction for most pension schemes."