UK. Prudential Closes $3.2 Billion in New UK Longevity Reinsurance Deals
Firm says market for pension de-risking is expanding at its fastest pace in years.
US-based Prudential Retirement, a unit of insurance giant Prudential Financial, has concluded $3.2 billion in previously undisclosed longevity reinsurance contracts, which the company says is another sign that pension de-risking activity in the UK is continuing at a brisk pace.
As part of the transactions, Prudential assumes the longevity risk for approximately 13,200 British retirees.
“The market for pension de-risking solutions is expanding at its fastest pace in years,” said Prudential in a release, “in part because such activity has become more affordable than at any point in the last decade.”
Prudential said the affordability of pension buy-ins and buy-outs is due in part to the improved funded status of UK pension plans.
“The average UK pension scheme is at or near full funding, a material improvement over the last two years,” Amy Kessler, Prudential’s head of longevity risk transfer, said in a release. “Pensions are actively taking advantage of this environment by locking in these gains and transferring risk, knowing that such periods don’t last forever.”
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