Reinsurance: Pru Teams Up With Phoenix on Longevity Agreement

The Prudential Insurance Company of America (PICA), a subsidiary of Prudential Financial, Inc. (PFI), a financial services leader with more than $1 trillion in assets under management as of June 30, 2019, with operations in the United States, Asia, Europe, and Latin America, and The Phoenix Group, Europe’s largest life and pensions consolidator and one of the fastest-growing providers of life and pension insurance in the United Kingdom, have entered into an inaugural longevity reinsurance agreement covering U.K. retirees. 

“We are excited to be working together with Phoenix,” said Christian Ercole, vice president, Longevity Risk Transfer and transaction lead for the Phoenix deal. “It has been a pleasure to witness the successful launch of their pension risk transfer business and we are thrilled to support them by re-insuring their longevity risk.”

PICA, a recognized leader in the global pension de-risking market, has been innovating and continuously creating new partnerships with pension insurers in the space since the firm’s 2011 launch of its longevity reinsurance product. PICA’s latest collaboration with Phoenix rounds out its efforts to engage in meaningful partnerships with virtually all of the significant insurance players in the U.K. market. With the addition of Phoenix, PICA, together with its affiliate, Prudential Retirement Insurance and Annuity Company (PRIAC),  now provides reinsurance support to pension insurers that account for roughly 90% of the annual volume of buy-ins and buy-outs in the U.K.

“We are delighted to have completed our first longevity reinsurance transaction with PICA. Phoenix views longevity reinsurance as a key risk management tool,” said Justin Grainger, Phoenix Group’s head of Bulk Purchase Annuities. “This transaction brings further depth to our reinsurer relationships and enhances our ability to offer competitive terms to pension schemes as we continue to develop our de-risking proposition.”

“PFI has consistently focused on supporting the entire U.K. pension de-risking market,” Rohit Mathur, head of international transactions for Longevity Risk Transfer at PFI’s retirement business said. “The addition of Phoenix is a culmination of our efforts over the past several years to do just that.”

PICA was advised by Willkie Farr & Gallagher LLP in New York and London. Phoenix was advised by CMS Cameron McKenna Nabarro Olswang LLP in London and Eversheds Sutherland in the U.S.

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