Abbey Life, a wholly-owned insurance company of Deutsche Bank, has entered into a longevity insurance transaction to provide the BMW (UK) operations pension scheme for life expectancy risks associated with nearly £3bn of pension scheme liabilities related to approximately 60,000 pensioners.

Under the transaction, the company said that it has utilised the proprietary longevity modelling techniques and structuring expertise of Paternoster, a pensions insurer, to provide the flexibility to adjust the specific benefit structure and better match the longevity risk of the scheme.

Through the transaction, the company will insure longevity risks of the BMW pension scheme while spreading a proportion of risk to a consortium of reinsurers. BMW chose to insure this risk in order to protect the sponsor against a financial risk in the UK pension scheme.

Nardeep Sangha, CEO of Abbey Life, said: “In bringing this leading solution to BMW and its UK pension scheme, we have demonstrated our ability to combine our balance sheet strength and internal expertise with the specialist pensions and longevity know-how at Paternoster to bring about a landmark transaction. As this market develops we are committed to providing innovative solutions to UK pension schemes.”