Pension Insurance Corporation’s first large deal under Solvency II emphasizes continuing need for longevity reinsurance
On June 8, Prudential Insurance Company of America (PICA, a PFI company) completed a longevity reinsurance transaction with Pension Insurance Corporation, a specialty insurer of defined benefit pensions.
The transaction is the third PICA has engaged in with Pension Insurance Corporation 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.
“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,” said Bill McCloskey, vice president, longevity reinsurance at PFI.
The latest deal underscores PFI’s strong leadership position in the reinsurance market, with $40 billion in international reinsurance transactions since 2011.
“This was a keenly contested process, showing continued strong demand for Pension Insurance Corporation reinsurance tenders,” Khurram Khan, head of Longevity Risk for Pension Insurance Corporation, said. “We are pleased to have placed the longevity cover within a short period and strengthened our partnership with PICA.”
This transaction marks Pension Insurance Corporation’s first sizeable pension insurance transaction under the new Solvency II regime. “This deal truly demonstrates that large buy-ins priced under Solvency II are still an attractive option for trustees,” McCloskey noted.
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Insurance and reinsurance products are issued by either Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, or the Prudential Insurance Company of America (PICA), Newark, NJ. Both are wholly owned subsidiaries of Prudential Financial Incorporated headquartered in the United States and have no affiliation to Prudential, plc headquartered in the United Kingdom. Each company is solely responsible for its financial condition and contractual obligations. Neither PRIAC nor PICA are authorized by the U.K. Prudential Regulation Authority or the Financial Conduct Authority, nor do they offer insurance or reinsurance in the United Kingdom. PRIAC and PICA do provide off-shore reinsurance to companies that have acquired U.K. pension risks through transactions with U.K. plan sponsors.
Control No. 0293098-00001-00
09 June 2016
Prudential Insurance Company of America seals third longevity reinsurance deal with Pension Insurance Corporation
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