By Ulrike Dauer
FRANKFURT--German reinsurer Hannover Re SE (HNR1.XE) Tuesday
said it is assuming the longevity risks of a portfolio of U.K.
pension liabilities, which will add some 1.9 billion euros ($2.59
billion) in premium revenues to group earnings.
The portfolio consists of 1.6 billion pounds ($2.69 billion) in
U.K. pension liabilities of French Total SA (FP.FR) that are
insured by primary insurer Pension Insurance Corp. It will add
EUR1.9 billion to Hannover Re's gross premium revenues overall, the
reinsurer said. Hannover Re expects 2014 revenues of at least EUR14
billion, of which around EUR43 million will be contributed by the
U.K. pension portfolio.
As with similar previous transactions, Hannover Re will only
manage the biometric risk of the portfolio for which it will
receive a fee, while PIC will assume the investment risk, Hannover
Re said.
Including the current transaction, Hannover Re has underwritten
block transaction deals for pension liabilities that add EUR12
billion to premium revenues overall, a company spokeswoman said. It
expects more such transactions, as companies will increasingly look
for ways to limit their pension liabilities, said Chief Executive
Ulrich Wallin.
In its block transactions for pension funds, Hannover Re
concentrates primarily on blue-collar workers.
Write to Ulrike Dauer at ulrike.dauer@wsj.com; Twitter:
@UlrikeDauer_
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