Prudential, PIC Reach $1.2 Billion Longevity Reinsurance Agreement


 
 
12:36 11/09/2017

Prudential Retirement, a unit of Prudential Financial, Inc. PRU , and Pension Insurance Corporation (PIC), have entered into their fifth longevity reinsurance transaction since 2015.

In the agreement, The Prudential Insurance Company of America assumes the longevity risk for $1.2 billion (about £900 million) in pension liabilities, covering approximately 4,000 pensioners across four pension schemes.

Demand for pension de-risking solutions in the U.K. has been growing significantly. PRU  has consistently been a leader and innovator in managing risks and capital using longevity reinsurance.

“Prudential is proud to strengthen its growing partnership with Pension Insurance Corporation,” said William McCloskey, Prudential’s head of transactions for international longevity reinsurance.

“Our teams have worked closely and collaboratively on five transactions worth nearly $5 billion. These agreements help PIC to manage longevity risk and thereby secure the retirement benefits of thousands of U.K. pensioners,” McCloskey continued.

Khurram Khan of Pension Insurance Corporation said, “Prudential is now an established longevity reinsurance market participant. This latest agreement covers four sizeable transactions executed by PIC during 2017. The collaborative nature of the talks and speed of deal completion highlight the things we value in a partnership. Over 2017 to date, PIC has now reinsured around £3 billion of longevity risk in support of an excellent year for new business.”

McCloskey added, “The resurgent market for pension de-risking in 2017—especially in the U.K.—has sparked demand for longevity reinsurance solutions. As part of our partnership, PIC is tapping into Prudential’s capability and capacity to craft solutions that have strengthened Prudential’s leading position in the U.K.’s longevity risk transfer market.”

This agreement represents Prudential Retirement’s fourth major transaction of 2017. Since 2011, PRU  has posted more than $45 billion in international reinsurance transactions.


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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