Prudential Retirement enters funded reinsurance business

Prudential Retirement, a business unit of Prudential Financial , is expanding its global longevity reinsurance business with a new offering. Prudential’s first transaction in the emerging funded reinsurance market closed in June with UK insurer Aviva .

“Prudential is thrilled to be able to announce this transaction with Aviva today. Aviva has been a great partner and we are delighted to complete our first funded reinsurance deal with them. Funded reinsurance, Prudential’s latest de-risking offering, allows an insurer to transfer both asset risk and longevity risk associated with pension and annuity liabilities. The reinsurer contracts to reimburse the insurer for monthly benefits for as long as people live. Up until now, Prudential has reinsured longevity risk from insurers, but here we also take the asset risk, becoming an additional layer of security, mirroring the insurer’s promise to pay all benefits for as long as the people live.” – Vice President and Head of International Transactions for Prudential Retirement, Rohit Mathur.

“This innovative funded reinsurance transaction further strengthens the relationship between Aviva and Prudential Retirement and is the result of a fantastic collaborative effort between both parties.” – Managing Director of Annuities at Aviva, John Smitherman-Cairns.

“Since early 2019, we have witnessed an increase in market activity and volumes in the UK market leading to a greater need for funded reinsurance solutions. Our entry into the funded reinsurance business is a natural place for us to expand. The presence of reinsurers like us, with both longevity capacity and asset management capabilities, will allow the UK market to continue to grow in new ways in the years to come.” – Head of International Reinsurance, Prudential, Amy Kessler.

“We are a top 10 global asset manager with strong expertise originating and managing corporate and private fixed income assets. Our offering indirectly provides UK insurers access to our asset origination capabilities to support this growing market.” – Vice President, International Reinsurance, Christian Ercole.