Prudential Insurance Company of America has provided Pension Insurance Corporation, the specialty insurer of defined benefit pensions, with longevity reinsurance covering around $1.1 billion of liabilities, int he third transaction between the two firms.
Prudential Insurance Company of America announced the completion of the latest longevity reinsurance transaction between the pair, in a deal covering longevity risk associated with pension liabilities amounting to roughly $1.1 billion and covering approximately 2,900 pensioners across two sections of the insurance and reinsurance broker Aon’s Retirement Scheme.
“This third reinsurance transaction with Pension Insurance Corporation demonstrates our success in and commitment to delivering a positive experience for our clients. It also highlights the growing demand for strategies to manage longevity risk along with the need to create reinsurance solutions in support of continued growth of the market,” commented Bill McCloskey, vice president, longevity reinsurance at Prudential Financial.
This latest deal means that Prudential Financial has now been involved in $40 billion of international longevity and pension related reinsurance transactions since 2011.
“This was a keenly contested process, showing continued strong demand for Pension Insurance Corporation reinsurance tenders,” explained Khurram Khan, head of Longevity Risk for Pension Insurance Corporation. “We are pleased to have placed the longevity cover within a short period and strengthened our partnership with PICA.”
This is the first sizeable pension insurance transaction under the new Solvency II regime for Pension Insurance Corporation, a regime that is expected to stimulate increasing demand for longevity reinsurance capacity.
“This deal truly demonstrates that large buy-ins priced under Solvency II are still an attractive option for trustees,” McCloskey said.