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Prudential & Rothesay Life in $1.2bn longevity reinsurance deal

10th March 2017 - Author: Luke Gallin

Prudential Financial has completed its sixth major longevity reinsurance transaction with Rothesay Life since 2011, announcing a $1.2 billion (£960 million) deal covering the liabilities associated with 22,500 pensioners, from eight pension plans.

The latest longevity reinsurance transaction between the pair sees Prudential Retirement, a unit of Prudential Financial, assume the longevity exposure for $1.2 billion of UK pensioner liabilities from Rothesay Life, which is the UK’s fourth largest writer of annuities.

Commenting on the latest deal Amy Kessler, Head of Prudential Retirement’s Longevity Risk Transfer operations, said: “Prudential is very proud to build upon its growing partnership with Rothesay Life. Through six years and six transactions, our teams have worked consistently and collaboratively to meet Rothesay’s longevity reinsurance needs and to help secure the retirement benefits for thousands of U.K. pensioners.”

Prudential notes that the transaction “underscores” the “thriving market for UK pension de-risking,” and also highlights the continued focus among U.K. group annuity writers to manage risks with longevity reinsurance solutions.

Tom Pearce, Managing Director, Rothesay Life, said; “Rothesay is delighted to have completed this transaction with Prudential, building upon the longstanding relationship between the two firms. Entering into this agreement further underscores our proactive approach to risk management as we provide for the secure retirement of thousands of annuitants.”

David Lang, Vice President of Product Development, and who led the $1.2 billion deal, also commented on the transaction; “The growing U.K. market for pension de-risking has created a significant need for reinsurance solutions. As part of our long-term partnership, Rothesay consistently taps into Prudential’s longevity reinsurance capacity and expertise to support its market-leading pension risk transfer business in the U.K.”

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