Reinsurance News

Barclays closes £7 billion UK longevity transaction with Aon as lead advisor

16th December 2022 - Author: Kane Wells

The Trustee of the Barclays Bank UK Retirement Fund has insured £7 billion of liability against longevity risk, with reinsurance provided by an insurance subsidiary of Prudential Financial Inc.

Global professional services firm Aon acted as lead advisor on the transaction, while Allen & Overy provided legal counsel and Willkie Farr & Gallagher served as legal counsel to Prudential Financial Inc (PFI).

This is the UK Retirement Fund’s (UKRF) second multi-billion-pound longevity transaction, following the £5 billion transaction executed with the Reinsurance Group of America (RGA) in December 2020.

The transaction makes assumptions about the longevity of pensioners, should their pensions be paid out for longer than expected, then the transaction would provide income to the UKRF from PFI via the insurer.

Peter Goshawk, the Chair of the Trustee, commented, “This second longevity transaction is an important part of our continued de-risking of the UKRF and improves benefit security for all members.

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“The success of the transaction is down to the collaboration and support of Barclays and the hard work of Barclays’ pension team, PFI and our advisers, all of whom I would like to thank.”

Rohit Mathur, head of international reinsurance for the Retirement Strategies business at PFI, added, “we are pleased to partner with the Trustee of the Barclays Bank UK Retirement Fund on a longevity transaction that helps to meet the client’s risk management objectives.

“It demonstrates PFI’s continued leadership and commitment to the global pension and longevity risk transfer market.”

Tom Scott, partner in Aon’s Risk Settlement team, said, “This transaction is a further substantive step in the Trustee’s journey to improve the resilience and security of UKRF members’ benefits.

“Working closely with Kate McInerney’s legal team at Allen & Overy, our multi-disciplinary team was able to conclude a successful negotiation for the UKRF. We leveraged the heightened capacity and appetite of the global reinsurance market during the broking process, as well as the UKRF’s existing operational infrastructure and longevity transaction experience.”

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