NEWARK, N.J., Nov. 09, 2017 - Prudential Retirement, a unit of Prudential Financial, Inc. (NYSE:PRU), and Pension Insurance Corporation (PIC), have entered into their fifth longevity reinsurance transaction since 2015. In the agreement, The Prudential Insurance Company of America assumes the longevity risk for $1.2 billion (about £900 million) in pension liabilities, covering approximately 4,000 pensioners across four pension schemes.
The transaction highlights the rebounding demand for pension de-risking solutions in the U.K., and the desire of many U.K. pension insurers to manage their risks and capital using longevity reinsurance. Prudential is a leader and innovator of such solutions.
“Prudential is proud to strengthen its growing partnership with Pension Insurance Corporation,” said William McCloskey, Prudential’s head of transactions for international longevity reinsurance. “Our teams have worked closely and collaboratively on five transactions worth nearly $5 billion. These agreements help PIC to manage longevity risk and thereby secure the retirement benefits of thousands of U.K. pensioners.” The two companies concluded their first agreement in 2015.
Khurram Khan of Pension Insurance Corporation said, “Prudential is now an established longevity reinsurance market participant. This latest agreement covers four sizeable transactions executed by PIC during 2017. The collaborative nature of the talks and speed of deal completion highlight the things we value in a partnership. Over 2017 to date, PIC has now reinsured around £3 billion of longevity risk in support of an excellent year for new business.”
McCloskey added, “The resurgent market for pension de-risking in 2017—especially in the U.K.—has sparked demand for longevity reinsurance solutions. As part of our partnership, PIC is tapping into Prudential’s capability and capacity to craft solutions that have strengthened Prudential’s leading position in the U.K.’s longevity risk transfer market.”
This agreement is Prudential Retirement’s fourth major transaction of 2017. The company is a global leader 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.
About Pension Insurance Corporation
Pension Insurance Corporation plc (“PIC”) is a leading provider of buy-ins and buyouts to the trustees and sponsors of U.K. defined benefit pension schemes. At half year 2017, PIC had insured 145,400 pension fund members and had £24.2 billion in financial investments, accumulated through the provision of tailored pension insurance buyouts and buy-ins to the trustees and sponsors of U.K. defined benefit pension schemes. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (FRN 454345). For further information please visit www.pensioncorporation.com/.
About Prudential Financial, Inc.
Prudential Financial, Inc. (NYSE:PRU), a financial services leader with more than $1.3 trillion in assets under management as of June 30, 2017, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. For more information, please visit news.prudential.com.
Prudential Retirement delivers retirement plan solutions for public, private, and nonprofit organizations. Services include defined contribution, defined benefit and non-qualified deferred compensation recordkeeping, administrative services, investment management, comprehensive employee education and communications, and trustee services, as well as a variety of products and strategies, including institutional investment and income products, pension risk transfer solutions and structured settlement services. With more than 85 years of retirement experience, Prudential Retirement helps meet the needs of 4.2 million participants and annuitants. Prudential Retirement has $417.0 billion in retirement account values as of September 30, 2017. Retirement products and services are provided by The Prudential Insurance Company of America (PICA), Newark, N.J., or its affiliates.
Reinsurance contracts are issued by The Prudential Insurance Company of America (PICA), Newark, N.J., 07102. PICA is not a U.K. authorized insurer and does not conduct business in the United Kingdom or provide direct insurance to any individual or entity therein. Prudential Financial, Inc. of the United States is not affiliated with Prudential plc, which is headquartered in the United Kingdom.