Reinsurance Group of America, Incorporated (RGA) announced the completion of an agreement whereby RGA will provide longevity risk protection and capital benefit on reserves of approximately EUR 12 billion to Delta Lloyd Levensverzekering, the Dutch life insurance arm of the Delta Lloyd Group (Delta Lloyd).
The transaction, with a duration of six years, is a liability replication derivative based on the Dutch population mortality results.
It therefore does not directly reinsure the underlying business of Delta Lloyd, but it efficiently gives Delta Lloyd desired capital and risk management benefits.
"We are very pleased to announce this inventive, first-of-a-kind transaction in the EMEA region," said Johan Tuijp, Managing Director, RGA Netherlands and Nordics. "RGA’s Dutch business team worked closely with our Global Financial Solutions team and the Delta Lloyd team to find the optimal solution to support Delta Lloyd’s objectives."
Niek Hoek, Chairman of the Executive Board, Delta Lloyd, said, "Delta Lloyd continues to explore further opportunities to manage its longevity risk efficiently through its capital management framework. This transaction provides us with medium-term protection against the rising costs associated with increases in life expectancy. Ultimately, it helps the Group maintain its ratings, meet obligations to customers and other creditors, and comply with current and anticipated regulatory requirements."
"This transaction is the latest example of RGA designing and implementing creative solutions for our clients to prepare for the upcoming capital requirements in Europe," said John Laughlin, Executive Vice President, Global Financial Solutions, RGA. "RGA has again demonstrated its ability to develop highly efficient capital and risk management solutions to support our clients’ evolving needs."
Reinsurance Group of America, one of the largest global life reinsurance companies in the world, provides clients with individual life reinsurance, individual living benefits reinsurance, group reinsurance, health reinsurance, financial solutions, facultative underwriting and product development.