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Retirement Income Group hits growth milestone

The Retirement Income Group (RIG), headed by former AXA chief executive Ralph Stewart, has hit a significant milestone in its development after securing its first reinsurance deal.

Friday, June 19th 2020, 7:50AM 1 Comment

Stewart, who is founder and managing director of RIG, says it had previously been too small to access reinsurance.

“But with $260 million now under management, we were able to contract AON in Sydney to complete a global reinsurance tender on our behalf,” he says.

RIG provides a fortnightly guaranteed lifetime income product for superannuitants under the Lifetime Retirement Income brand, having launched in the New Zealand variable annuity market in 2015.

RIG’s fund shifts market and longevity risk away from the retiree and onto RIG, enabling retirees to receive the regular retirement income supplement for life. Such products are commonplace in the OECD and represent trillions in retirement assets globally.

“When it came to considering reinsurance, we had no idea what to expect. However, the response was amazing, with the world’s largest reinsurers responding very quickly to our tender,” Stewart says.

Tenderers included Swiss Re, Berkshire Hathaway and Hannover Re, with Hannover Re successful. Despite due diligence being completed during the height of the Covid-19 market volatility it took only five weeks to reach binding terms.

“Hannover Re deeply understands retirement income and the importance of the sector,” Stewart says.

“We are proud to be able to partner with such a large, established and experienced reinsurer. This is a tremendous outcome for our current and future retired investors.”

Hannover Re is the third largest reinsurance group in the world, with revenue of €22.5 billion ($NZ20.8 billion), total assets of €71.4 billion ($NZ66 billion), and a Standard & Poor’s credit rating of AA-.

Under the reinsurance agreement, Hannover Re will receive part of the premiums RIG’s customers pay for their retirement income guarantee, in exchange for holding the liability for 85 percent of RIG’s longevity risk.

It applies to all RIG’s in force variable annuity business as at 31 March 2020.

Tags: Ralph Stewart Retirement Income Group Variable Annuities

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Comments from our readers

On 26 June 2020 at 10:42 pm peterharland said:
A fantastic strategic stride forward, Ralph, one BIG STEP etc etc, very well done..

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