LONDON (12 August 2019) – Aon, (NYSE:AON) a leading global professional services firm providing a broad range of risk, retirement and health solutions, has announced that it advised HSBC in Bermuda on a £7 billion longevity swap, involving the HSBC Bank (UK) Pension Scheme and Prudential Insurance Company of America (PICA), the second-largest ever deal of its type.
The deal uses a captive solution with an HSBC-owned insurer in Bermuda, with PICA then reinsuring the transaction, which relates to around half the scheme's pensioner liabilities.
A multi-disciplinary team from Aon helped with the establishment and licensing of the new captive solution, together with advising on the operational infrastructure required to service the deal on an ongoing basis. The team included members of Aon’s UK based risk settlement group, led by senior partner Martin Bird, and Aon Insurance Managers (Bermuda), led by managing director Anup Seth.
Tom Scott, principal consultant in Aon’s Risk Settlement team said:
“This landmark transaction in which we supported HSBC in Bermuda represents another step forward in terms of innovation, with captive structures and other types of insurance structures now enabling even the very largest schemes to access the reinsurance market in an effective manner.”
Martin Bird, senior partner and head of Risk Settlement at Aon, said:
“It is particularly pleasing that Aon was able to bring together all the necessary expertise to support this transaction. Working in the various offshore locations on this type of longevity deal requires a combination of both jurisdictional expertise and good working relationships - as well as the very longevity-specific expertise related to operational deal structuring.
“We continue to see very strong demand for pension scheme de-risking solutions, whether in bulk annuity or longevity-only formats – and 2019 remains on course to be another record breaking year for this market.”
More information can be found in the Aon Benefits and Trends Survey 2019.
Notes to Editors
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
Aon announced in May 2018 it will retire the business unit brands of Aon Benfield and Aon Risk Solutions, which follows the retirement of the Aon Hewitt business unit brand in 2017. This move was designed to increase the rate of innovation across the firm and make it easier for colleagues to work together to bring the best of Aon to clients. Aon has five specific global solution lines: Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions, Health Solutions and Data & Analytic Services.
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