PartnerRe has concluded a £725 million longevity reinsurance agreement with specialist insurer of defined benefit pension funds Pension Insurance Corporation (PIC).
PIC said that it wrote £3.7 billion of new business in 2017 with the trustees of defined benefit pension schemes, and reinsured £4 billion of longevity exposure, including some longevity exposure accumulated from prior years. As of 31 December 2017, PIC had reinsured 73 percent of its total longevity exposure.
“PartnerRe is delighted to provide a reinsurance solution that will help PIC to manage their capital more efficiently,” said Kevin O’Regan, head of longevity and portfolio reinsurance at PartnerRe. “As their reinsurance partner, we hope that the confidence and reassurance of having well-structured reinsurance in place will enable PIC to continue their vital service to pension scheme members, and we look forward to supporting Khurram and the PIC team on future transactions.”
Longevity reinsurance helps insurers reduce longevity and other demographic related risks, optimises reserving and solvency capital requirements as prescribed under Solvency II, and provides for a more certain and stable liability profile.
Khurram Khan, head of longevity risk at PIC, said: “This deal covers a group of lives whose demographic profile made this a challenging portfolio to price. We enjoyed working with PartnerRe. Their focused and nimble approach was central to enabling a rapid completion. We trust that this agreement serves as a useful platform for future business.”
PartnerRe, Pension Insurance Corporation, Longevity reinsurance, Solvency II, Bermuda, London, UK