Prudential in longevity reinsurance deal with Pension Insurance Corp.

The Prudential Insurance Company of America (PICA), a division of Prudential Financial, Inc. (PFI) company, has entered into a longevity reinsurance transaction with UK-based insurer Pension Insurance Corporation plc (PIC), a provider of specialist insurance for defined benefit pension funds.

The transaction sees PICA providing longevity reinsurance protection to PIC for risks associated with the pension liabilities of over 6,700 pensioners.

“This transaction represents another milestone in our efforts to expand our strategic partnerships with UK insurers, like PIC, to bring secure retirement to UK pensioners,” stated William McCloskey, vice president, longevity reinsurance at Prudential.

“This collaboration represents a further channel for the flow of PIC’s longevity risk to the reinsurance sector,” commented Khurram Khan, Head of Longevity Risk Management at PIC. “We’re pleased to begin this new partnership, which brings increased efficiency and capacity to PIC’s reinsurance capability. This means we can offer better solutions to our customers.”

Details of the size of the reinsurance arrangement have not been disclosed at this time.

PIC is one of the leading providers of solutions that enable defined benefit pension funds to de-risk themselves, including longevity exposures, while PICA and Prudential also provide similar services but are one of the leading longevity reinsurance markets in the world.

The fact these two have entered into this longevity reinsurance agreement could be the first of a number of transactions between the two, as both seek to capitalise on pension fund appetite to de-risk and access sources of capacity for longevity risk transfer.