Guernsey has long been recognised as a cell company leader
and the past 12 months have only served to reinforce this position.
The last year has seen two ground-breaking longevity swap
structures being established in Guernsey using a captive
insurance company in place of insurance intermediaries, thereby
cutting out intermediary fees and removing the need for price
averaging.
Cell leader
The first of these saw the trustees of the BT Pension Scheme,
Britain's largest corporate pension fund, set up its own
captive insurance company, and then reinsure its longevity risk
with the US-based life insurance company, the Prudential
Insurance Company of America. In the biggest deal of its kind, the
arrangement covered 25% of the scheme's exposure to increased
life expectancy and amounted to £16bn of the scheme's
liabilities.
