An insurer set up by former Prudential chief executive Jonathan Bloomer has adopted a derivative to protect against the risk of people living longer, in a move that may raise hopes for UK companies facing billions of pounds in extra pensions bills thanks to new life expectancy guidelines.

Lucida, a pensions insurer set up by Bloomer last autumn, will use a JP Morgan-structured derivative to protect some of the assets of an annuity business it bought from Bank of Ireland Life last month.