Pension Insurance Corporation plc (PIC) has entered into a £1 billion (US$1.28bn) longevity reinsurance transaction with French reinsurer SCOR, meaning the insurer has now reinsured over 70% of its overall longevity risk.
In a statement, PIC explains the new reinsurance agreement covers the longevity exposure of roughly 7,000 in-payment lives and their spouses, where necessary, across six defined benefit pension schemes that transacted buy-ins with PIC during the last twelve months.
PIC is a specialist insurer and provider of buy-ins and buyouts to sponsors and trustees of UK defined benefit pension schemes, and its latest longevity deal means it now has eight highly-rated longevity reinsurance counterparties.
The £1 billion deal means the firm has increased the portion of its longevity exposure it has reinsured since the end of 2016 from 68%, to more than 70%.
Head of Longevity Risk at PIC, Khurram Khan, said; “A full market tender process was run with SCOR being the successful reinsurer. PIC is now protected against unexpected longevity increases for another 7,000 lives and can release regulatory capital as a direct result. We have also acquired a new reinsurance partner thereby helping to widen our counterparty relationships under these very long-term contracts.”
