Prudential and Warburg Pincus announce launch of Prismic Life Re

Prudential Financial and Warburg Pincus announced the launch of Prismic Life Reinsurance , a licensed Class E Bermuda-based life and annuity reinsurance company. Prudential and Warburg Pincus, together with a group of investors, have agreed to make equity investments in Prismic and will oversee its long-term strategy through participation on its board of directors.

Prudential expects to reinsure to Prismic a block of structured settlement annuity contracts with reserves of approximately $10 billion, subject to the receipt of required regulatory approvals. Prudential’s obligations to the holders of these annuities will remain unchanged following the reinsurance arrangement and Prudential will continue to administer the contracts. From there, Prudential aims for Prismic to be a strategic reinsurance partner with the ambition to grow their reinsurance relationship materially in years to come. PGIM and Warburg Pincus will provide asset management services to Prismic.

Through expanded reinsurance capacity, Prudential expects Prismic will allow the company to provide more people with access to its life and annuity products.

A group of global investors has agreed to make equity investments in Prismic, alongside Prudential and Warburg Pincus, giving Prismic a combined initial equity investment of $1 billion. Prudential and Warburg Pincus will initially own 20% and 15% of the equity in Prismic, respectively. Prismic’s board will include two independent directors and one director nominated by each of Prudential, Warburg Pincus, and the group of investors.

Prismic will leverage PGIM’s and Warburg Pincus’ global investment management capabilities across public and private markets, including public fixed income, private credit, private real estate, and private equity. Prismic will become a client of PGIM Portfolio Advisory, a newly established affiliate within PGIM that combines asset-liability management expertise with portfolio strategy and asset allocation to deliver integrated solutions across public and private asset classes.

Prismic will be led by Amy Kessler, a 30-year financial services industry veteran, who will serve as CEO. Kessler was the founding leader of Prudential’s international reinsurance business.

Nandini Mongia, president of Prudential’s Open Architecture Solutions, will represent Prudential on Prismic’s board. Mongia most recently served as Prudential’s treasurer where she played a leading role in the creation of this reinsurance platform. Mike Thompson, managing director, will represent Warburg Pincus on Prismic’s board.

“This unique reinsurance platform will play an important role in our vision to be a global leader in expanding access to investing, insurance, and retirement security for people around the world. Prismic will enhance our ability to address the evolving needs of our insurance customers and clients while continuing to meet our obligations to policyholders. It represents a formidable combination of industry-leading expertise, global capabilities, and the backing of two of the world’s leading insurance and asset management firms.” – Charles Lowrey, chairman and CEO of Prudential Financial.

“Warburg Pincus is thrilled to enter into this strategic partnership with Prudential in the creation of Prismic. The combination of Prudential’s significant in-force and new business origination capabilities, PGIM’s expertise in public fixed income, private credit, and real estate with our private markets investment capabilities presents Prismic with a unique opportunity for future, sustainable growth. Prismic’s strategy of enhancing long-term investment returns through an end-to-end ecosystem of liability origination, asset-liability management, and asset management clearly aligns with our focus on long-term fundamental value creation. We look forward to the partnership with Prudential and the success of Prismic.” – Chip Kaye, CEO, Warburg Pincus.