BMW hands pension to Deutsche

Car maker BMW has offloaded £3bn of longevity risk from its UK pension scheme to Deutsche Bank, in the largest longevity insurance transaction conducted to date. Deutsche’s insurance subsidiary Abbey Life carried out the deal, which was structured with pension insurer Paternoster in which Deutsche is a shareholder, in order to cover the pension scheme liabilities related to approximately 60,000 pensioners. Abbey Life will insure longevity risks on the BMW pension scheme and transfer a proportion of the risk to a consortium of reinsurers, including Hannover Re, Pacific Life Re and Partner Re, the bank said. Other firms have recently looked at the longevity swap market as a way of covering the risk posed by people living longer.