The pension fund for HSBC has bought a £7bn insurance contract that will cover the UK bank against the chance that retired staff live longer than it expects; a deal that could spark a renaissance for such longevity-swap transactions.

The deal, which covers around a fifth of the scheme’s pensions bill, has been agreed with US insurer Prudential Financial, according to a statement on August 6. If HSBC pensioners live longer than predicted, Prudential Financial has agreed to pick up the extra bill, in return for fees payable over time.