Prudential Retirement and the Pension Insurance Corporation (PIC)have confirmed their sixth longevity insurance transaction in three years.
As part of the deal , Prudential Insurance Company of America will assume the longevity risk of $1.2 bn (£900bn) in pension liabilities for PIC, representing 7500 members across two pension schemes. Both firms have now committed to a total of 6 billion (£4.4bn) in longevity reinsurance deals.
Tom Cahill, a director on Prudential’s longevity reinsurance team comments on the collaboration “Our two teams have not only worked closely on several transactions, but we have also collaborated on innovative new processes that have helped smaller schemes access the pension de-risking marketplace.”
The UK institutional market has recently seen an uptake in longevity reinsurance deals, aided by improved funding levels across UK pension schemes. Earlier this year, Prudential sold £12bn in annuity assets to reinsurance firm Rothesay Life.
Jay Shah, chief origination officer at Pension Insurance Corporation predicts: “We believe the reinsurance market will continue to be competitive in support of the significant de-risking activity expected over 2018.”
