BMW pension scheme insures £3 billion of longevity risk

The BMW (UK) Operations Pension Scheme - formerly the Rover Group Pension Scheme - has entered into the largest ever pension scheme insurance deal in respect of around 60,000 current pensioners.  The longevity insurance deal with Abbey Life, a wholly owned subsidiary of Deutsche Bank, will hedge the pension scheme against the life expectancy risks associated with nearly £3 billion of pension scheme liabilities.

Although Abbey Life will insure the longevity risks, it will spread a proportion of them to a consortium of reinsurers, including Hannover Re, Pacific Life Re and Partner Re.