Prudential signs £900m reinsurance deal with PIC

Prudential Financial unit Prudential Retirement has struck a longevity reinsurance agreement with Pension Insurance Corporation.

As part of the agreement, Prudential Insurance Company of America (PICA) assumes the longevity risk for £900 million (about $1.2 billion) in pension liabilities, representing approximately 7,500 pensioners across two pension schemes.

This agreement signals strong demand for longevity reinsurance in the UK, especially as a result of the growing desire among companies to de-risk their pensions, according to a company statement. This desire has become more achievable due to the improved funding levels of UK schemes, many of which have spent several years progressively de-risking their liabilities, and are now well placed to do a buyout or buy-in, the statement said.

Earlier in February, PICA  assumed the longevity risk for approximately $1.8 billion (£1.3 billion) of annuity liabilities held by UK-based Scottish Widows in what was the companies' first-ever longevity reinsurance agreement.

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