Prudential reinsures $1.2bn of longevity for Pension Insurance Corp.


Prudential Retirement is providing reinsurance to assume $1.2 billion of longevity risk from Pension Insurance Corporation (PIC), the fifth such transaction the pair have entered into since 2015, with now around $5 billion of longevity risk reinsured between the pair.

The longevity reinsurance transaction sees The Prudential Insurance Company of America taking on the longevity related liabilities associated with approximately 4,000 pensioners across four pension schemes, totaling $1.2 billion (or £900m).

Prudential said today that this deal highlights, “The rebounding demand for pension de-risking solutions in the U.K., and the desire of many U.K. pension insurers to manage their risks and capital using longevity reinsurance.”

“Prudential is proud to strengthen its growing partnership with Pension Insurance Corporation,” commented 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 added, “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 further said, “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 is Prudential’s fourth major longevity risk transfer transaction of 2017, with over $45 billion in international reinsurance transactions since 2011, including the largest longevity swap and reinsurance deal ever, the $27.7 billion transaction for the BT Pension Scheme.

Read about many historical longevity swap and reinsurance transactions in our Longevity Risk Transfer Deal Directory.

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