WTW has launched a streamlined longevity swap solution designed to make longevity hedging more accessible to defined benefit (DB) pension schemes with between £100m and £1bn of liabilities.

The new service, Longevity Stream, will provide schemes with a structured route to the reinsurance market through a fixed-fee arrangement, pre-negotiated contracts and a simplified operational structure.

WTW said the solution had been developed to support schemes pursuing run-on strategies while retaining flexibility to move to a bulk annuity transaction in future.

Longevity Stream will give trustees access to a panel of global reinsurers, with Zurich acting as intermediary.

The pre-negotiated contractual framework was developed with CMS and is intended to reduce the implementation and ongoing management costs that have historically made longevity swaps more difficult for small and medium-sized schemes to access.

More than £170bn of longevity risk has been transferred to reinsurers in the UK since 2009, according to WTW, with the consultancy acting as lead adviser on transactions covering more than £100bn.

However, the firm said the market had largely been concentrated among the largest DB schemes because of the complexity and cost involved.

WTW senior director, Rhys Mellens, noted that demand had increased as schemes sought to manage longevity exposure as part of run-on strategies or ahead of future insurance transactions.

“We are seeing increased interest from schemes that want to access this market but have been held back by the perceived complexity and cost,” he added.

“Longevity Stream removes those barriers, giving schemes a more efficient route to market whilst retaining future flexibility and enabling them to access the attractive pricing currently available.

WTW said the launch came amid renewed focus on longevity risk following recent Continuous Mortality Investigation projections and record-low death rates in 2026.

The firm argued that the potential for further improvements in life expectancy could materially affect scheme liabilities and future buy-in pricing.

CMS partner, Amanda Chammings, said that Longevity Stream offers "great flexibility" for schemes that previously may have found it difficult to access the longevity swap market, enabling them to further reduce their risk, strengthen scheme security and protect long-term outcomes for members.

---