Germany-based reinsurer Hannover Re has signed a £1bn ($1.55bn) longevity swap deal with UK-based assurer Legal & General, under which the reinsurer will assume the longevity risk of about 11,500 retired employees of UK-based industrial firm Pilkington. L&G announced yesterday that it had insured Pilkington's pension liabilities and had hedged the longevity risk through its deal with Hannover Re. L&G chief executive Tim Breedon observed that "the pension fund de-risking market will continue to grow as pension funds look to further de-risk. In 2011 we completed our first £1bn pension buy-out, and today we have announced our first ever longevity insurance swap". Hannover Re said that it was assuming the biometric risk, while the investment and inflation risks remain with L&G. Hannover Re CEO Ulrich Wallin said that "going forward, too, we anticipate good business opportunities since it is likely that companies will increasingly seek to limit their direct pension obligations". Hannover Re expects £60m in premium income attributable to financial year 2012, with £800m in premiums over the entire term of the deal. Aon Hewitt acted as lead adviser on the deal. The head of the company's Risk Settlement Group, Martin Bird, noted "a flurry of activity" around the turn of the year (Rolls Royce, British Airways, Pilkington), and said that "we now have a critical mass of deals announced. With that we are starting to see some real standardization in deal structure".