Prudential completes $1.1bn longevity reinsurance transaction
Prudential Insurance Company of America has completed a longevity reinsurance transaction with Pension Insurance Corporation, a specialty insurer of defined benefit pensions.
This is the third transaction Prudential has engaged with Pension Insurance Corporation in and covers longevity risk associated with pension liabilities amounting to approximately $1.1 billion for approximately 2,900 pensioners across two sections of the Aon Retirement Scheme.
According to Prudential, the latest deal underscores PFI’s strong leadership position in the reinsurance market, with $40 billion in international reinsurance transactions since 2011.
Bill McCloskey, vice president of longevity reinsurance at PFI, said: “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.”
Khurram Khan, head of longevity risk for Pension Insurance Corporation, added: “This was a keenly contested process, showing continued strong demand for Pension Insurance Corporation reinsurance tenders.
“We are pleased to have placed the longevity cover within a short period and strengthened our partnership with PICA.”
The transaction also marks Pension Insurance Corporation’s first sizeable pension insurance transaction under the new Solvency II regime.
McCloskey added: “This deal truly demonstrates that large buy-ins priced under Solvency II are still an attractive option for trustees.”
