Major Dutch insurer Delta Lloyd has again transferred a part of its longevity exposure to a reinsurer. On 25 June 2015, Delta Lloyd signed an agreement with Reinsurance Group of America (RGA) to mitigate longevity risk related to its Dutch life insurance portfolio.

The contract concluded with RGA has a notional of EUR350 million, the maximum payout at maturity of the contract. Through this transaction Delta Lloyd aims to reduce the financial effects of policyholders living longer than expected, which results in longer durations of annuities and pension payments. The contract has a duration of eight years and relates to underlying longevity reserves of approximately € 12 billion.

The derivatives team of the Banking & Finance practice of Baker & McKenzie Amsterdam, led by Corinne Scot, assisted Delta Lloyd in this complex and innovative deal. The same team advised Delta Lloyd on its first transfer of longevity risk to RGA, in August 2014.