Life reinsurer Pacific Life Re has completed a funded reinsurance transaction via its newly-formed Global Funded Solutions (GFS) business line.
Covering pensioner and deferred liabilities of around £190 million, the transaction was completed with a leading UK insurer.
This was the life reinsurer’s second asset-intensive transaction written on an annuity deal and was led by Vanessa HoVon in partnership with Hogan Lovells.
Funded reinsurance involves the reinsurance of both longevity and asset risks associated with pension liabilities, in an effort to protect against the financial risk of an unexpected increase in life expectancy.
Additionally, there’s inbuilt protection against unexpected losses in the invested assets.
In return for a single premium, the reinsurer pays monthly benefits to the insurer for as long as the insured members live.
Commenting on the deal, HoVon said, “I am really excited to have been involved in this transaction. We have recently seen an increasing de-risking demand in the UK market and we are pleased to be able to further support our clients through our new funded reinsurance proposition.”
Phill Beach, Head of GFS,added “It is fantastic to see this transaction across the line in such a short period of time, which paves the way for future opportunities.”
Steven McEwan, Insurance Partner at Hogan Lovells, noted “We are delighted to have worked in partnership with Pacific Life Re on this transaction, and to have seen first-hand how innovative and attentive they are in serving the needs of their clients.
“We have a long-standing relationship with Pacific Life Re and look forward to continuing to work with them to better protect insurers and manage their risks going forward.”