Zurich longevity swap to cover £2bn National Grid pension liabilities

It will protect the grid operator against the risk of rising costs as a result of 6,000 pensioners and future dependent members living longer than expected

By Priyanka Shrestha

Zurich Insurance has agreed a longevity swap deal to cover more than £2 billion of pensioner liabilities for National Grid.

The transaction will protect the grid operator against the risk of rising costs as a result of around 6,000 pensioners and future dependent members living longer than expected.

Zurich said it has reinsured a “significant proportion” of the longevity risk with Canada Life Reinsurance.

Andrew Bonfield, Finance Director at National Grid said: “We are very pleased to announce the completion of this longevity insurance which covers around two-thirds of the liabilities of the National Grid Electricity Group pension liabilities.

“This demonstrates our ongoing commitment to the security of our pension arrangements and represents a significant step in our long term strategy to manage down the level of pensions risk for National Grid shareholders and electricity consumers.”

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