Prudential reinsures USD2.9 bn of longevity risk

Prudential Retirement Insurance and Annuity Company, one of the subsidiaries of Prudential Financial Inc. has entered into a new longevity reinsurance arrangement with UK-based insurer Legal & General Group (L&G), covering USD2.9 billion of its pension liabilities against the risk of longevity improvements.

This is the second longevity reinsurance transaction between Prudential and L&G Group, as the latter adds protection for a portion of its pension bulk annuity business.

This latest transaction sees Prudential providing longevity reinsurance on approximately USD2.9 billion of Legal & General’s liabilities for retirees covered by its pension bulk annuity portfolio.

The longevity reinsurance protection provides two benefits to L&G, helping it to optimise its capital, while also offloading some of the longevity risk associated with its underwriting of annuities portfolios.