The Prudential Insurance Company of America (PICA) has announced its first longevity reinsurance transaction with UK-based insurer Pension Insurance Corporation (PIC), a specialist insurer of defined benefit pension funds.
Under the terms of the agreement, PICA will provide reinsurance to PIC for longevity risk associated with pension liabilities for more than 6,700 pensioners.
This longevity reinsurance transaction follows other recent reinsurance transactions in the UK, including 2014’s British Telecom Pension Scheme (BTPS), which stands as the largest offshore risk transaction to date.
“This transaction represents another milestone in our efforts to expand our strategic partnerships with UK insurers, like PIC, to bring secure retirement to UK pensioners,” said William McCloskey, vice president of longevity reinsurance at Prudential.
Prudential has completed the largest known pension risk transfer transactions in North America, including General Motors, Verizon, Motorola, Bristol-Myers Squibb and most recently, a transaction with Kimberly-Clark Corporation in the US, as well as the transaction with BTPS.
Khurram Khan, head of longevity risk management at PIC, added: “This collaboration represents a further channel for the flow of PIC’s longevity risk to the reinsurance sector.”
“We’re pleased to begin this new partnership, which brings increased efficiency and capacity to PIC’s reinsurance capability. This means we can offer better solutions to our customers.”
