A structural gap in the UK longevity swap market has kept smaller defined benefit pension schemes out of a widely used risk transfer tool. More than £170 billion of longevity risk has been transferred to reinsurers since 2009, yet the route has remained largely inaccessible to schemes below a certain scale.
WTW is targeting that gap with Longevity Stream, a fixed-fee service designed to bring defined benefit (DB) schemes with between £100 million and £1 billion of liabilities into the market. Zurich acts as intermediary insurer, with trustees gaining access to a panel of global reinsurers under pre-negotiated contracts developed with law firm CMS.
Longevity swaps allow pension schemes to transfer the risk that members live longer than expected to a reinsurer. The reinsurer then takes on the liability for excess longevity costs. Smaller schemes have historically been deterred by implementation and ongoing management costs rather than by a lack of reinsurer appetite.
The launch comes as the UK pension risk transfer (PRT) market enters a period of heightened activity. WTW's De-Risking Report 2026 forecast that total risk transferred to insurers and reinsurers will reach £70 billion this year. That figure is up 15% from 2025, with longevity swaps expected to account for up to £20 billion of the total.
CMI mortality improvement projections and record low death rates in 2026 have brought renewed focus to longevity risk, according to WTW. Schemes that have delayed acting on this exposure face the prospect of further life expectancy improvements as an unhedged liability.
Rhys Mellens, senior director at WTW, said demand had grown as schemes sought to manage longevity risk within both run-on and de-risking strategies.
"We are seeing increased interest from schemes that want to access this market but have been held back by the perceived complexity and cost," Mellens said. "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."
The fixed-fee arrangement and standardised documentation aim to reduce the time and legal cost that have made bespoke longevity swap transactions less viable for smaller schemes. Pre-negotiated contracts cut the upfront work that has previously added friction for trustees with limited in-house resource.
Amanda Chamming's, partner at CMS, said the structure enables a broader range of trustees to access the longevity swap market. She added that it allows schemes to reduce risk, strengthen security and protect long-term outcomes for members.
WTW said the product has been built with future flexibility in mind. It is designed to support run-on strategies and enable a straightforward transition to a bulk annuity. The firm has acted as lead adviser on more than £100 billion of longevity risk transferred to reinsurers since 2009.
