Heritage Insurance Management, recently acquired by Artex Risk Solutions - the captive management subsidiary of Arthur J. Gallagher & Co. - has been selected by BT Pension Scheme (BTPS) to provide insurance management services for the administration of BTPS's newly established insurance company based in Guernsey.
BTPS has established the insurer - BTPS Insurance ICC Ltd - to underwrite longevity arrangements which will protect the scheme against costs associated with potential increases in life expectancy.
BTPS has transferred longevity risk to the insurer, which has in turn reinsured this longevity risk in the reinsurance market. By using a wholly owned insurer, the scheme was able to access capacity in the global insurance and reinsurance market directly.
Additionally, Guernsey's Incorporated Cell Company (ICC) legislation was utilised to establish the insurer which provided a cost effective platform for the transaction combined with flexibility for the scheme in relation to any future requirements.
Paul Eaton, New Business Director of Heritage Insurance Management, said: "BTPS spent a considerable amount of time planning for this transaction and part of the analysis involved the consideration of where to establish the insurer.
"Guernsey was identified as the ideal jurisdiction having both modern and well regarded insurance legislation combined with a mature financial services infrastructure and a well reputed business-focussed regulatory regime. The selection of the insurance manager was another key decision and Heritage was able to provide expertise, operational capability and willingness and ability to work with BTPS in a bespoke fashion on this project."
Merise Wheatley, Director and Project Leader at Heritage Insurance Management, for the establishment of the BTPS insurer, added: "It has been a great experience to work on this transaction which was ground breaking in terms of both size and structure, but also made best use of Guernsey's strengths as a captive domicile. I and the rest of the Heritage team are delighted that this has been launched successfully to provide BTPS with long term longevity risk protection."
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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