Prudential said it has added a new longevity reinsurance arrangement, adding Europe and UK focused pension insurance, buy-in and buy-out specialist The Phoenix Group as a counterparty.
Prudential Insurance Company of America (PICA) and Phoenix have entered into an inaugural longevity reinsurance agreement covering UK retirees.
With Phoenix the largest pension consolidator in Europe, there is plenty of scope for the relationship to grow.
“We are excited to be working together with Phoenix,” commented Christian Ercole, vice president, Longevity Risk Transfer and transaction lead for the Phoenix deal. “It has been a pleasure to witness the successful launch of their pension risk transfer business and we are thrilled to support them by re-insuring their longevity risk.”
Prudential is positioning itself as the dominant provider of longevity reinsurance solutions to UK pension insurers and consolidators.
The firm said that, with the addition of Phoenix, Prudential now has meaningful partnerships with almost all the significant pension insurance players in the UK market.
Prudential and its affiliate Prudential Retirement Insurance and Annuity Company (PRIAC) now provide reinsurance support to pension insurers accounting for nearly 90% of the annual volume of buy-ins and buy-outs in the UK, which is an impressive market penetration.
“We are delighted to have completed our first longevity reinsurance transaction with PICA. Phoenix views longevity reinsurance as a key risk management tool,” stated Justin Grainger, Phoenix Group’s head of Bulk Purchase Annuities. “This transaction brings further depth to our reinsurer relationships and enhances our ability to offer competitive terms to pension schemes as we continue to develop our de-risking proposition.”
“PFI has consistently focused on supporting the entire U.K. pension de-risking market,” Rohit Mathur, head of international transactions for Longevity Risk Transfer at PFI’s retirement business explained. “The addition of Phoenix is a culmination of our efforts over the past several years to do just that.”
Willkie Farr & Gallagher LLP in New York and London advised PICA. Phoenix was advised by CMS Cameron McKenna Nabarro Olswang LLP in London and Eversheds Sutherland in the U.S.
“We have invested in our pricing and transaction teams and that is especially important right now as U.K. pension schemes are racing to get risk transfer deals over the line during the six-month Brexit delay,” Mathur added. “With so much uncertainty on the horizon, we are happy to be in a position to support the robust pipeline of pension buy-ins and buy-outs seeking to be completed while market conditions hold.”
Read about many historical longevity swap and reinsurance transactions in our Longevity Risk Transfer Deal Directory.