23 January 2018Actuarial & underwriting

PartnerRe concludes £725m reinsurance deal with PIC

Pension Insurance Corporation (PIC), a specialist insurer of defined benefit pension funds, has finalised a £725 million longevity reinsurance agreement with PartnerRe.

The transaction follows a full market tender process and covers the longevity risk acquired when PIC insured the Dockworkers Pension Fund in a full buy-in, in November 2017.

PIC wrote £3.7 billion of new business in 2017 with the trustees of defined benefit pension schemes, compared to £2.6 billion year-on-year. It also reinsured £4 billion of longevity exposure, including some longevity exposure accumulated from prior years.

As of December 31 2017, PIC had reinsured 73 percent of its total longevity exposure, compared with 68 percent year-on-year.

“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.”

Khurram Khan, head of longevity risk at PIC, added: “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.”

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