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PIC reinsures longevity risk on $1.1bn of pension liabilities with PICA

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Pension Insurance Corporation (PIC), which recently agreed a pension buy-in with the Aon Retirement Plan for £900m (€1.1bn), has now sealed a reinsurance deal covering longevity risk associated with the transaction with Prudential Insurance Company of America (PICA).

PICA said this was the third longevity reinsurance deal it had made with PIC, and showed that there was a continuing need for longevity reinsurance under the new Solvency II regulatory regime.

It said the transaction covered longevity risk associated with pension liabilities amounting to about $1.1bn (€973m) for some 2,900 pensioners across two sections of the UK’s Aon Retirement Scheme.

PIC announced the Aon buy-in in May.


Khurram Khan, the defined-benefit insurance specialist’s head of longevity risk, said: “This was a keenly contested process, showing continued strong demand for Pension Insurance Corporation reinsurance tenders.”

Noting that the Aon deal was PIC’s first big pension insurance transaction under the new Solvency II regime, Bill McCloskey, vice president, longevity reinsurance at PICA owner PFI said: “This deal truly demonstrates that large buy-ins priced under Solvency II are still an attractive option for trustees.”



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