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Prudential reinsures $450m of longevity risk in fifth Rothesay deal


Prudential Retirement, a division of Prudential Financial Inc., has completed its fifth longevity reinsurance transaction with Rothesay Life. The latest deal sees Prudential covering pension liabilities amounting to $450m for the insurer.

Under the terms of this latest transaction, which follows not long after a $1.7 billion longevity reinsurance deal between the two, Prudential will provide reinsurance for longevity risks associated with a block of eight pension schemes that had been insured by Rothesay Life.

The reinsurance provided will cover the longevity risk associated with pension liabilities of $450 million (approximately £288m) for approximately 25,000 pensioners and deferred members of the eight UK pension schemes.

“Today’s transaction is another example of Rothesay’s leadership in the thriving U.K. market,” commented Amy Kessler, senior vice president and head of longevity reinsurance at Prudential. “The strong partnership between Rothesay and Prudential supports the growing pension de-risking trend in the United Kingdom and ensures that there is capacity for pension schemes seeking to de-risk.”

Prudential continues to display its significant appetite for assuming longevity risks. Not only had it assumed $1.7 billion of longevity risk from Rothesay earlier this year, but it also entered into a deal in July to reinsure $27.7 billion of longevity risk associated with BT Pension Scheme liabilities.

“We are pleased that Rothesay continues to choose and trust us to help secure the retirement benefits for thousands of pensioners,” said David Lang, Director, Pension Risk Transfer Actuary for Prudential Retirement.

Tom Pearce, managing director of Rothesay Life, added “This latest transaction is a further example of Rothesay Life’s commitment to its pensioners. We’re delighted to build upon our partnership with Prudential as we continue to focus on delivering a secure retirement for our annuitants.”

Just in December Rothesay Life also reached £1 billion of longevity reinsurance secured from Pacific Life Re.

View our list of major longevity swap, longevity reinsurance and risk transfer transactions.

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