Global reinsurance firm SCOR has provided capacity to back a £1 billion longevity risk transfer transaction for specialist defined benefit pension fund insurer Pension Insurance Corporation plc (PIC).
It’s the latest very large longevity swap and reinsurance transaction for PIC, with this transaction seeing SCOR reinsure a £1 billion portfolio of risk for the insurer.
The transaction covers the longevity risk for around 7,000 in-payment pensioners and, if applicable, their spouses too. The longevity risk has been pooled from six defined benefit pension schemes which had completed buy-in transactions with PIC in the last year.
Khurram Khan, Head of Longevity Risk at PIC, commented; “A full market tender process was run with SCOR being the successful reinsurer. PIC is now protected against unexpected longevity increases for another 7,000 lives and can release regulatory capital as a direct result. We have also acquired a new reinsurance partner thereby helping to widen our counterparty relationships under these very long-term contracts.”
SCOR now takes the number of rated longevity swap reinsurance counterparties that PIC works with to eight. PIC said that it has now reinsured over 70% of its total longevity exposure (68% at YE2016), thanks to this and other reinsurance arrangements made this year.
Read about many historical longevity swap and reinsurance transactions in our Longevity Risk Transfer Deal Directory.