Prudential Retirement, part of Prudential Financial, Inc., has announced that it closed a significant $1.7 billion in new longevity reinsurance transactions during the first six months of 2020, and that it expects the market to end the year in a strong position.
The company attributes its busy and successful start to 2020 to adjusting quickly to virtual closings during the novel coronavirus pandemic, and also a vibrant smaller end of the UK pension buy-in and buy-out marketplace.
Rohit Mathur, Vice President and Head of International Transactions for Prudential Retirement, highlighted how quickly the firm was able to shift to an entirely virtual environment.
“While we are now in the midst of incredible uncertainty with the coronavirus, such uncertain times have strengthened our conviction that pension de-risking is an all-weather solution for our institutional client base. For those pension schemes that had de-risked their asset portfolio and that were ready to transact before COVID, there was nothing holding them back from moving forward with their deals,” said Mathur.
As pension schemes look to de-risk and offload some of their longevity exposure, the longevity reinsurance market has blossomed in a number of regions, notably the UK.
Prudential notes that overall, the UK market has remained resilient through the ongoing pandemic, and Mathur sees a robust pipeline in the country for the second-half of the year, with the longevity reinsurance market expected to end 2020 strongly.
Tom Cahill, Vice President, Longevity Reinsurance at Prudential Retirement, added: “The market is functioning very smoothly, and the smaller end of the market has been quite active.
“We are proud to have reinsured the risk of many individual schemes in the first half of 2020, including one stand-alone mid-sized transaction and well over a dozen smaller schemes through our flow reinsurance offerings. We are especially proud to be supporting a new insurer on our market-leading flow reinsurance platform.”
As of March 31st, 2020, Prudential Retirement has $465.8 billion in retirement account values, and the firm helps meet the needs of 4.6 million participants and annuitants.
Insurance and reinsurance broker Willis Towers Watson (WTW) reported at the end of June that despite the impacts of the COVID-19 pandemic, 2020 is still on track to be a record year for longevity swaps.