The Prudential Insurance Company of America (PICA), a Prudential Financial, Inc. (PFI) company, has announced its first longevity reinsurance transaction with UK-based insurer Pension Insurance Corporation plc (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) transaction.
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“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, longevity reinsurance at Prudential.
“This collaboration represents a further channel for the flow of PIC’s longevity risk to the reinsurance sector,” Khurram Khan, Head of Longevity Risk Management at PIC, said. “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.”
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 U.S., and the largest offshore longevity risk transaction with BTPS located in the UK.
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