5 February 2018Insurance

Prudential strikes $1.8bn reinsurance deal with Scottish Widows

The Prudential Insurance Company of America (PICA) and UK-based Scottish Widows have agreed to their first-ever longevity reinsurance agreement. PICA has assumed the longevity risk for approximately $1.8 billion (£1.3 billion) of annuity liabilities held by Scottish Widows.

“Prudential is privileged to be chosen by Scottish Widows as it seeks to efficiently manage its longevity risk over the coming decades,” said David Lang, Prudential’s lead negotiator for this transaction.

Michael Downie, the finance director, annuities and investment strategy at Scottish Widows, added: “Throughout the negotiations, PICA took the time to understand our needs and actively tailored their offering to meet our requirements.”

Amy Kessler, Prudential’s head of longevity reinsurance, said: “The insurer and reinsurer market continues to expand and evolve, and we expect 2018 to continue recent growth trends as managing risk capital becomes increasingly impactful.”

Prudential operates in the pension reinsurance market with more than $45 billion in international reinsurance transactions since 2011, including the largest longevity risk transfer transaction on record, a $27.7 billion transaction involving the BT Pension Scheme, according to a Feb. 5 press release.

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More on this story

21 December 2017   Prudential Retirement, a unit of Prudential Financial, and Legal & General Group have concluded their sixth longevity reinsurance agreement since 2014 – a deal hailed as representing the resurgence of the longevity reinsurance sector in the UK.
Alternative Risk Transfer
23 January 2018   Bermudian PartnerRe has revealed a £725 million longevity reinsurance agreement with UK-based specialist insurer Pension Insurance Corporation (PIC).