WTW targets £100m-£1bn schemes with streamlined longevity swaps
By IAN Editorial Desk – WTW on Tuesday launched Longevity Stream, a streamlined longevity swap solution aimed at UK defined benefit schemes with £100m to...
WTW on Tuesday launched Longevity Stream, a streamlined longevity swap solution aimed at UK defined benefit schemes with £100m to £1bn of liabilities, opening a structured route to a panel of global reinsurers for pension plans below the size range that has typically dominated the market. The launch targets the smaller end of the longevity swap market, where WTW had interest in transactions of between £100 million and £500 million.
The structure is designed to make smaller transactions more workable by using pre-negotiated contracts developed with CMS and a streamlined operational framework. That matters because longevity swaps have traditionally been used mainly by larger schemes, and standardised documentation and processes can reduce execution friction where smaller mandates have less room to absorb transaction costs and timetables.
WTW's move extends an approach it had already used higher up the market. Its 2014 Longevity Direct service was built for medium-sized pension plans with liabilities between £1bn and £3bn, giving them direct access to the reinsurance market through WTW’s own cell or captive insurance company and aiming to bypass insurers and investment banks as traditional intermediaries. The model was also intended to reduce transaction costs and completion times.
A related example came in the Willis Pension Scheme transaction, where longevity risk was routed through a Guernsey-based captive insurance company owned by the trustee and then reinsured by Munich Re as part of WTW’s Longevity Direct solution. That shows the role a captive structure can play in connecting a pension scheme to reinsurance capacity, rather than relying on a conventional intermediary chain.
The new launch also follows evidence that smaller transactions were already becoming more viable. WTW had said longevity swaps for as little as £100 million of pensioner liability had become attractive, and that in 2025 it had been lead adviser on two deals with less than £500m of liabilities. Those transactions suggested that pricing and process had moved far enough for sub-£1bn schemes to be treated as a distinct segment rather than as occasional exceptions.
Longevity swap pricing is generally built around fixed payments linked to expected pension outgoings, plus a fee, with that fee negotiated through a competitive process and described in transaction documents as the reinsurance fee. In practice, the main ongoing cost is the risk fee payable to the reinsurer, which, for a pensioner-only transaction, is typically 3% to 4% of projected pension cashflows.
That cost has a direct bearing on how schemes judge affordability against their asset strategy. On a pensioner liability profile with a 12-year duration, a 3% to 4% fee is described as roughly equivalent to a 0.25% to 0.33% per annum increase in the required return on backing assets, so savings in legal work and process can matter if smaller schemes are to achieve acceptable overall economics.
WTW has not named participating reinsurers in the launch material, but the established UK longevity swap market already includes MetLife, Pacific Life Re, Munich Re, RGA, SCOR, Canada Life Reinsurance and Prudential Financial’s insurance subsidiary, with Zurich often used as the intermediary insurer. Access to a panel matters because fee competition is central to pricing and because smaller schemes have historically had fewer practical routes to run that process efficiently.
Sources: news.google.com · wtwco.com
