Pensions - Articles - PIC reinsures £1.6bn of longevity with PICA

 The reinsurance agreement captures in-payment lives across 74 schemes. These individuals represent part of PIC’s exposure to longevity risk acquired through writing pension insurance buy-ins and buyouts over the last few years. This is the second reinsurance transaction that PIC has concluded with PICA in 2015, covering the longevity risk for around 17,000 individuals and, where applicable, their spouses.

 PIC has now concluded a number of longevity reinsurance agreements with global reinsurers, accounting for approximately £9 billion of pension liabilities, or c.80% of its total longevity exposure. During the past 12 months alone, PIC has reinsured close to £4 billion of longevity risk, reflecting its rigorous approach to risk management.

 “This transaction represents another milestone for the longevity reinsurance market and we’re pleased that PIC has once again chosen to partner with PICA as a provider of longevity risk solutions,” said William McCloskey, vice president, longevity reinsurance. “Our partnership with PIC supports the growing pension de-risking trend in the United Kingdom and ensures there is capacity for pension schemes seeking to manage their risk.”

 Khurram Khan, Head of Longevity Risk Management at PIC, said: “This is an unprecedented deal for PIC, in terms of both the nature and size of the project. Despite the added complexity, we are delighted to have concluded this transaction within a relatively short period.”