Prudential Retirement, a business unit of Prudential Financial has announced its fourth longevity reinsurance transaction since 2011 with Rothesay Life and its affiliates.
Under the terms of this new transaction, Prudential will provide reinsurance of longevity risk to Rothesay Assurance Limited for a block of 93 pension schemes.
The transaction covers pension liabilities of $1.7 billion (approximately equal to 1 billion Pounds Sterling) for 20,000 pensioners and deferred members in the U.K.
This is the second longevity reinsurance transaction that Prudential has closed in the past month, following its groundbreaking agreement to reinsure $27.7 billion of longevity risk associated with BT Pension Scheme liabilities.
"We are pleased to be able to collaborate with Rothesay in another transaction that helps to provide secure retirement benefits for thousands of pensioners," said Phil Waldeck, senior vice president of Pensions and Structured Solutions for Prudential Retirement.
"This transaction demonstrates the continued strength of the pension risk transfer market and the capacity in the insurance and reinsurance sector to support the growing pension de-risking trend and to provide greater certainty for managing plan liabilities with longevity risk solutions," said Amy Kessler, senior vice president and Head of the Longevity Risk Transfer team for Prudential Retirement.
"Rothesay Life is delighted to build upon its partnership with Prudential with this new transaction," said Tom Pearce, managing director, Rothesay Life. "This latest deal is a further example of Rothesay Life’s low risk approach to managing its business."
Rothesay Life is an insurance company established in the U.K. Rothesay Life provides annuity and other longevity products to corporate defined benefit pension plans, tailored to meet the specific needs of corporate sponsors, trustees and pension plan members. Rothesay Life is authorized and regulated by the U.K.’s Prudential Regulation Authority.
Reinsurance contracts are issued by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT 06103. PRIAC is not a U.K. authorized insurer and does not conduct business in the United Kingdom or provide direct insurance to any individual or entity therein. Prudential Financial, Inc. of the United States is not affiliated with Prudential plc, which is headquartered in the United Kingdom.
Prudential Retirement delivers retirement plan solutions for public, private, and non-profit organizations. Services include defined contribution, defined benefit and non-qualified deferred compensation record keeping, administrative services, investment management, comprehensive employee education and communications, and trustee services, as well as a variety of products and strategies, including institutional investment and income products, pension risk transfer solutions and structured settlement services.
With over 85 years of retirement experience, Prudential Retirement helps meet the needs of over 4.0 million participants and annuitants. Prudential Retirement has $330.5 billion in retirement account values as of June 30, 2014. Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, or its affiliates.