SCOR has completed a reinsurance deal with Pension Insurance Corporation plc (PIC), a specialist insurer of defined benefit pension funds, that relates to £1.2 billion of longevity risks.
The agreement covers the longevity risk of around 8,000 in-payment lives across six separate defined benefit pension schemes.
It also marks the second such reinsurance contract between SCOR and PIC, building upon a similar £1 billion agreement that was reached in 2017.
PIC explained that longevity reinsurance forms an intrinsic part of its business model, and the insurer has now reinsured more than 70% of its total longevity exposure through treaties with eleven reinsurers.
The company’s longevity reinsurance business volumes for 2018 currently exceed £4 billion and are expected to exceed a record £5 billion by the end of the year.
“We are extremely pleased to have supported PIC in their continued efforts to help improve the security of retirees’ pensions,” said Rupen Shah, Global Head of Longevity at SCOR.
“It was a pleasure working with the PIC team and we are particularly happy that the investment put in by both teams during our first transaction last year paid dividends in helping to complete this deal in such an effective and timely manner,” he continued.
Khurram Khan, Head of Longevity Risk at PIC, also commented: “We are delighted to have signed this second agreement with SCOR – characterised by both parties working in a highly efficient and collaborative manner.
“As UK bulk annuity market volumes continue to increase, reinsurance transactions need to become smoother and offer wider coverage. It is pleasing to see our reinsurance partners responding to these changing demands.”