2017 has seen Guernsey underline its position as the go-to jurisdiction for longevity risk transfers with the announcement of two further deals, following on from the first ground-breaking deals using the Guernsey 'Incorporated Cell Company' (ICC) in 2014/2015.
In summer this year, MMC UK Pension Fund Trustee Limited, the pension fund of Marsh & McLennan Companies, completed the longevity hedge of £3.4 billion in liabilities – covering around 7,500 pension fund members – using the Guernsey-domiciled ICC, Mercer ICC Limited.
Also this year, British Airways' Airways Pension Scheme (APS) is reportedly using its Guernsey captive structure, APS Insurance ICC Limited, to hedge £1.6 billion of liabilities.
Appleby have been advising on this type of deal since the first deals in 2014, from the sponsor side and the pension trustee's side. In our experience it is the Guernsey ICC structure itself that is attracting the business to Guernsey, combined with the fact that Guernsey is the number one captive domicile in Europe.
Originally published in IFC Review's Guernsey 2018 report.
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