Resolution Life has completed its first reinsurance agreement in the UK, reinsuring the longevity and asset risks associated with UK pension liabilities of a leading UK regulated insurer. The name of the insurer was not disclosed.
The agreement also enables Resolution Re, Resolution Life’s Bermudian reinsurance platform, to complete more deals in the UK at a time of accelerating growth in the buyout market.
Resolution Life was advised on the transaction by Eversheds Sutherland. Both parties used their understanding of both Bermudian and UK regimes to complete the agreement and Resolution Re worked closely with its regulator in Bermuda to develop a funded reinsurance structure.
The Eversheds Sutherland team was led by partner Hugo Laing, with partner Richard Batchelor and senior associate Henry Dean and associate Celine Balleyguier.
As well as the commercial team at Resolution, the Eversheds Sutherland team worked closely with the legal team at Resolution Life, including Claire Singleton and Caroline Rollestone-Brown.
Resolution Life said the transaction was the first “of its kind” for the reinsurer. It had previously signed reinsurance agreements with Lincoln National Corporation, Dai-Ichi Life, Zurich Insurance Group, Allianz Suisse and Allianz Life North America.
Steve Hales, chief executive officer of Resolution Re, said: “Having the experience of the UK pension risk transfer (PRT) market and of structuring funded reinsurance deals to call on and utilise has been an essential part of getting this deal done, which is integral to the growth of Resolution Re and its expansion into the UK PRT market.”
Hales added that the agreement provides capacity to the UK PRT writers in a sustainable way that considers the interests of all stakeholders including insurers and regulators.
Hugo Laing, partner at Eversheds Sutherland, added that funded reinsurance has had a great focus in the UK and remains an important part of supporting the growth of the UK pension risk transfer market as it accelerates over the next few years.
Laing added that in the current market, Resolution Re has “carefully” structured this transaction and worked closely with the regulators to ensure that this deal, and any more that may follow it, are consistent with regulatory objectives and capable of supporting growth in this market in a sustainable way.
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