Two previously undisclosed transactions with Rothesay Life
amount to $6 billion in new longevity reinsurance business
completed by Prudential Financial
The Prudential Insurance Company of America (PICA), a business
unit of Prudential Financial, Inc. (NYSE: PRU), and a recognized
leader in the global pension de-risking market, has announced the
closing of its seventh and eighth strategic longevity reinsurance
transactions with Rothesay Life Plc, reinsuring a combined $6
billion of pension liabilities associated with two bulk annuity
transactions completed in the second half of 2019.
“2019 was an extraordinary year in the global risk transfer
markets, having started the year at the best funded status that
U.S., U.K. and Canadian pension funds had seen since the financial
crisis,” said Amy Kessler, head of longevity risk transfer for
PICA. “This, together with excellent asset availability, a vibrant,
well-capitalized insurer and reinsurer market allowed many schemes
to transact ahead of when they might have expected to and put the
industry on a path to break records in 2019.”
Kessler added, “in late 2019 and early 2020 we have observed
some weakening in funded status, and many sponsors will need to
monitor the market closely as strong insurer and reinsurer pricing
continue to provide opportunities for sponsors to de-risk.”
“These transactions with Rothesay Life prove the value of being
prepared,” said Scott Gaul, who on Dec. 1 took over Prudential
Retirement’s Investment and Pension Solutions businesses. “They
were pursued in a thoughtful and efficient manner, driven by
long-term de-risking goals set by the pension schemes, culminating
in the ability to transfer risk in an incredibly busy marketplace.
Looking ahead to 2020, in order for opportunistic transactions to
work in our extremely busy pension risk transfer markets, the
scheme, consultants, insurers and reinsurers all have to be
aligned, prepared, and ready to act.”
Dave Lang, vice president and Prudential’s relationship manager
for Rothesay, added the two new transactions demonstrate Rothesay
Life’s ability to identify a market opportunity and assemble the
right team to capitalize on it. “The longstanding partnership
between Prudential and Rothesay Life dates back to our first
transaction in 2011,” Lang said. “This trusting relationship helped
get these two very important transactions done while market
conditions held.”
“2019 was a record year for Rothesay Life, and we were delighted
to have PICA alongside us to provide reinsurance on two of the
largest transactions of the year,” said David Cox, head of
reinsurance, Rothesay Life. “The Rothesay Life and PICA teams have
been working together for nearly a decade now, and the
well-established relationship and processes enabled us to close two
deals in a timely and efficient manner.”
Gaul and Kessler added that while volatility has increased, they
both see a strong start to the market this year, noting activity
with many small to midsize plan sponsors who are taking advantage
of the current market opportunity. “In 2020, smaller transactions
will be a growth area to watch, as will the burgeoning risk
transfer markets in Canada and the Netherlands,” Kessler
concluded.
About Prudential Retirement
Prudential Retirement delivers retirement plan solutions for
public, private, and nonprofit organizations. Services include
defined contribution, defined benefit and nonqualified 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 more than 85 years of retirement experience, Prudential
Retirement helps meet the needs of 4.5 million participants and
annuitants. Prudential Retirement has $500 billion in retirement
account values as of Dec. 31, 2019. Retirement products and
services are provided by The Prudential Insurance Company of
America (PICA), Newark, N.J., or its affiliates.
PICA issued the reinsurance from the United States. Neither PICA
nor PRIAC is licensed or regulated by the U.K. Prudential
Regulation Authority as an insurer or regulated by the Financial
Conduct Authority, nor does either offer reinsurance in the United
Kingdom or directly insure U.K. pension risks.
Insurance products are issued by Prudential Retirement Insurance
and Annuity Company (PRIAC), Hartford, CT, or The Prudential
Insurance Company of America (PICA), Newark, NJ. Both are
Prudential Financial companies. Each company is solely responsible
for its financial condition and contractual obligations.
About Prudential Financial, Inc.
Prudential Financial, Inc. (NYSE: PRU), a financial wellness
leader and premier active global investment manager with more than
$1.5 trillion in assets under management as of Dec. 31, 2019, has
operations in the United States, Asia, Europe, and Latin America.
Prudential’s diverse and talented employees help to make lives
better by creating financial opportunity for more people.
Prudential’s iconic Rock symbol has stood for strength, stability,
expertise and innovation for more than a century. For more
information, please visit news.prudential.com.
About Rothesay Life
Rothesay Life was established in 2007 and has become one of the
leading providers of regulated insurance solutions in the U.K.
market for pensions de-risking. This strong growth has been
achieved through the steady accumulation of pension scheme clients,
significant strategic acquisitions and the reinsurance of annuity
portfolios. Rothesay Life has assets under management of over £50
bn and insures the pensions of over 800,000 individuals.
Existing Rothesay Life clients include the pension schemes and
customers associated with such names as Asda, National Grid, Allied
Domecq, Cadbury’s, telent, Prudential, British Airways, Lehman
Brothers, Aegon, Zurich Assurance, the Post Office and the Civil
Aviation Authority.
Rothesay Life was founded on several core pillars:
- Clear and disciplined business strategy;
- Prudent underwriting;
- Meticulous management of risk and cautious investment strategy
supporting enhanced customer security;
- Excellence in execution; and
- Robust operational processes underpinning excellent customer
service
Rothesay Life has three substantial institutional shareholders,
Blackstone, GIC and Massachusetts Mutual Life Insurance Company,
who provide the company with long- term support for its growth and
development.
Rothesay Life is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority. Further information is available
at rothesaylife.com.
1031441-00001-00
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version on businesswire.com: https://www.businesswire.com/news/home/20200218005030/en/
MEDIA: For Prudential: Josh Stoffregen-Foye Direct:
973-802-6930 Mobile: 973-204-2540
josh.stoffregen@prudential.com
For Rothesay: Alex Child-Villiers/William Barker +44 (0)207 975
1415 +44 (0)7795 425580
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