Life Sector Group Clients and Market Update (Internal material - CMS only)


Dear All,

First, and most importantly, we’re delighted to welcome our new colleagues from D&W (now, of course, CMS!) to the group. We will be updating our circulation list – but in the meantime please feel free to distribute this (internally!) to any members of your teams to whom you think it may be of interest. And if people want to be added to the list, please do let Henriika Hara or Emma Wynne know.

That aside, a couple of highlights to note.

As everyone will hopefully have seen, CMS was recently voted as the leading firm advising the insurance sector in London, the UK and Europe in this year’s Reactions magazine legal survey. Great news – and hopefully we may be adding to that further at the Reactions Awards dinner this week.

On the client / market side, this week was notable for the announcement, by long-standing client Pension Insurance Corporation (“PIC”), that it had completed the second largest bulk annuity buy-in policy in the UK to date – insuring over £1.6 billion of Total UK Pension Scheme’s pension liabilities. It has also been announced that, at the same time, PIC transferred substantially all of the associated longevity risks to Hannover Re under one of the largest reinsurance transactions they have concluded to date. And teams from the CMS Life Group advised PIC on both legs of the deal.

The transaction follows on from the £3.6bn of buy-ins completed in March by the ICI Pension Fund with Legal & General and Prudential, and the £1.5bn buy-out of the EMI Group Pension Fund completed by PIC last year (another deal on which the CMS Life Group advised).

These “mega” buy-ins (as the FT has called them) may point to a wider boom in the pension de-risking and bulk annuity market – with some experts forecasting that the longevity risk transfer market may see up to £100 billion in transactions in the next two years driven by favourable market conditions, and with capacity and demand currently well-aligned (see the Artemis article on this below). Let’s hope so. If the PIC / Total experience is anything to go by, that could be good news for CMS!

Kind regards,


Market Issues and Trends

- Longevity risk transfer market to boom according to experts (link)

- Insurance companies building up stakes in the property market to plug funding gap (link)*

Company and Client news


- MetLife struggling to with new anticipated US Federal Reserve regulations (link)

- MetLife appoints new CEO for Australian operations (link)

- MetLife provides £122.8 million senior debt financing package for the acquisition of student housing in London (link)

Pension Insurance Corporation

- Pension Insurance Corporation insures £1.6 billion of pensioner liabilities for Total UK (link)

- The Freemantle Group Pension Plan enters into a £46 million buy-in with PIC (link)


- Zurich Life announces withdrawal from group life insurance market (link)


- Prudential’s expects “significant” disruption to UK annuity sales following Budget announcement (link)

Deutsche Bank/Abbey Life

- Deutsche Bank sued over role in engineering a funding deal for Brazil’s Óleo e Gás (link)

- Deutsche Bank appoints new Head of Rates Sales (link)

- Deutsche Bank defends capital increase at annual meeting (link)


- SCOR awarded the 2013 "Prize for Best Financial Operation - M&A" by the Club des Trente (link)

- SCOR creates Alternative Solutions unit, to include ILS business (link)

Swiss Re

- Swiss Re’s Canada head moves to Aviva (link)

Aberdeen Asset Management

- Aberdeen Asset Management completes the migration of all equity funds and mandates run by Scottish Widows Investment Partnership (link)


- Aviva CEO warns insurer returns on bulk annuity deals to come under pressure due to mounting competition (link)

- Aviva closes two funds (link)

Regulatory Developments

- US life insurer shares up after the US Senate approves bill giving more flexibility to Federal Reserve regulators to apply capital rules (link)

- EIOPA launches EU-wide Insurance Stress Test (link)

- German government sings off new draft legislation to ensure life insurers meet interest rate promises (link)

- EIOPA introduces a new format for its Financial Stability Report (link)

Investments and Long-Term Finance

- French Senate recommends stalled EcoTax PPP contract to resume, financing provided by Deutsche Bank (link)

- Major UK hospital PFI to be terminated early; ProjCo partially owned by Aberdeen Asset Management (link)

- Aviva financed Ayrshire College PPP reaches financial close (link)

Longevity and Alternative Risk Transfer

- Increased reinsurance willingness to support longevity swap deals according to Aon Hewitt (link)

- Legal & General expands longevity insurance team (link)