Prudential, Legal & General reach sixth longevity reinsurance agreement
December 21 2017 - 2:00AM
Business Wire
Prudential Retirement, a unit of Prudential Financial, Inc.
(NYSE:PRU), and Legal & General Group plc (“Legal &
General”) concluded their sixth longevity reinsurance agreement
since 2014. The Prudential Retirement Insurance and Annuity Company
(PRIAC) assumes longevity risk for approximately $800 million (£600
million) in pension liabilities, which are held by Legal &
General as part of its bulk annuity business. The transaction
covers more than 2,000 pensioners. Legal & General and
Prudential have now partnered on six transactions that together
reinsure nearly $8 billion in longevity risk.
The agreement signals the resurgent market for longevity
reinsurance and de-risking solutions in the U.K. in 2017, with
market volumes up significantly since the 2016 Brexit vote. The
de-risking of pension schemes has become an expectation among
shareholders and key stakeholders in companies across the
globe.
“Prudential is proud to strengthen its partnership with Legal
& General,” said David Lang, Prudential’s lead negotiator for
this transaction. “As a result of these agreements, Legal &
General can better manage its longevity risk and secure the
retirement benefits of thousands of U.K. pensioners.” Prudential’s
most recent transaction with Legal & General prior to this was
in October 2016.
Joyeeta Kanungo, head of new business reinsurance for Legal
& General, said: “This transaction marks a furthering of our
partnership with Prudential, whose expertise and strength we value
highly. The transaction is also another example of longevity
reinsurance having a positive impact in enabling U.K. pension
schemes to de-risk efficiently with a strong insurer such as Legal
& General.”
Bill McCloskey, Prudential’s head of transactions for
international longevity reinsurance, said, “The longevity
reinsurance market is more vibrant than ever, especially in the
U.K. With this agreement, Legal & General is tapping into
Prudential’s unique ability to keep up with the huge demand in the
market today, and benefits from our use of predictive analytics and
the strongest transaction team in the industry. These investments
have enabled Prudential to develop and sustain meaningful
relationships with its insurance counterparties.”
Legal & General is one of the U.K.’s leading financial
services companies. It has been active in the pension de-risking
market for more than 30 years.
Prudential is a global leader in the pension reinsurance market
with more than $45 billion in international reinsurance
transactions since 2011, including the largest longevity risk
transfer transaction on record, a $27.7 billion transaction
involving the BT Pension Scheme. Prudential was named “Reinsurer of
the Year” in 2017 by Risk.net for the fourth year in a row.
About Legal & General Group
Established in 1836, Legal & General is one of the U.K.’s
leading financial services groups and a major global investor, with
a number of growing businesses in the U.S. and in other countries.
At June 30, 2017, Legal & General had over £951 billion in
total assets under management. Over 15 million people worldwide
rely on Legal & General to help them save for the future and to
protect their families and their homes.
Legal & General works with companies and pension trustees to
help people build security in retirement, being the U.K.’s largest
investment manager for U.K. corporate pension schemes, a major
provider of auto-enrolled pensions and a market leader in pensions
de-risking. The company has also made a commitment to invest around
£15 billion in direct investments, with £12 billion already
invested in areas such as homes, urban regeneration, clean energy
and small business finance, driving economic growth and making a
positive difference to the U.K.’s built environment.
About Legal & General Retirement
Legal & General Retirement has been an active participant in
the U.K. bulk annuity market for over 30 years. Legal & General
offers a range of de-risking solutions, which includes buyout,
buy-in, longevity insurance and liability-driven investment (LDI),
to pension schemes of all sizes. Legal & General has expertise
in investment management, all aspects of defined benefit provision
as well as an in-depth understanding of mortality trends and
longevity risk. Corporates, trustees or advisers looking for
further information on the pension scheme insurance de-risking
solutions available from Legal & General should contact the
Pension Risk Transfer team on +44 020 3124 2273.
About Prudential Financial, Inc.
Prudential Financial, Inc. (NYSE:PRU), a financial services
leader with more than $1 trillion in assets under management as of
Sept. 30, 2017, has operations in the United States, Asia, Europe,
and Latin America. Prudential’s diverse and talented employees are
committed to helping individual and institutional customers grow
and protect their wealth through a variety of products and
services, including life insurance, annuities, retirement-related
services, mutual funds and investment management. For more
information, please visit news.prudential.com.
Prudential Retirement delivers retirement plan solutions for
public, private, and nonprofit organizations. Services include
defined contribution, defined benefit and non-qualified deferred
compensation recordkeeping, 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 4.2 million participants and
annuitants. Prudential Retirement has $416 billion in retirement
account values as of Sept. 30, 2017. Retirement products and
services are provided by The Prudential Insurance Company of
America (PICA), Newark, N.J., or its affiliates. Reinsurance
contracts are issued by Prudential Retirement Insurance and Annuity
Company (PRIAC), Newark, N.J. 07102. 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20171220006148/en/
MEDIA:Legal & General:Deborah Goodier,
+44-203-128-1299deborah.goodier@landg.comorPrudential
Financial:Gregory Roth, 973-802-6585Mobile:
973-477-0570gregory.roth@prudential.com
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