Prudential Financial and Scottish Widows reach first longevity reinsurance agreement

By a News Reporter-Staff News Editor at Insurance Weekly News -- The Prudential Insurance Company of America (PICA) a Prudential Financial, Inc. company (NYSE:PRU), and Scottish Widows Limited, a subsidiary of Lloyds Banking Group plc, agreed to their first-ever longevity reinsurance agreement. PICA has assumed the longevity risk for approximately $1.8 billion (£1.3 billion) of annuity liabilities held by Scottish Widows.

"Prudential is privileged to be chosen by Scottish Widows as it seeks to efficiently manage its longevity risk over the coming decades," said David Lang, Prudential's lead negotiator for this transaction. "With our new partnership, Scottish Widows attains more flexibility for managing longevity risk, trusting that, with PICA, it has chosen a strong counterparty with shared values and a long-term commitment to the longevity risk transfer business."

Michael Downie, the finance director, Annuities and Investment Strategy at Scottish Widows, said: "I am delighted to have completed our first longevity reinsurance transaction with Prudential Financial. Their financial strength and long-term commitment to the market was a key consideration for Scottish Widows when selecting a counterparty. Throughout the negotiations, PICA took the time to understand our needs and actively tailored their offering to meet our requirements."

Amy Kessler, Prudential's head of longevity reinsurance, said, "The insurer and reinsurer market continues to expand and evolve, and we expect 2018 to continue recent growth trends as managing risk capital becomes increasingly impactful. We are proud that Scottish Widows has chosen to use Prudential's innovative longevity risk transfer solutions and benefit from our ability to keep up with surging demand from the U.K. and globally. We look forward to building on this important new relationship in the years to come."

Prudential is a global leader in the pension reinsurance market, with more than $45 billion in international reinsurance transactions since 2011, including the largest longevity risk transfer transaction on record, a $27.7 billion transaction involving the BT Pension Scheme. Prudential was named "Reinsurer of the Year" in 2017 by Risk.net for the fourth year in a row. About Scottish Widows Scottish Widows was founded in 1815 as Scotland's first mutual life office and is one of the most recognized brands in the life, pensions and investment industry in the U.K.

In November of 2017 Scottish Widows won "Company of the Year" at the Financial Adviser Service Awards, along with "5 Star" service awards in each of the individual categories of Life & Pensions, Investments and Mortgages.

Scottish Widows also won a number of other awards throughout 2017, including "Pensions Firm of the Year" at the FD Service Excellence Awards, "Pensions Provider of the Year" at the Pensions Age Awards, "De-Risking Provider of the Year" at the Pension and Investment Provider Awards, and "Risk Reduction Provider of the Year" at the U.K. Pensions Awards. About Prudential Financial, Inc. Prudential Financial, Inc. (NYSE: PRU), a financial services leader with more than $1 trillion in assets under management as of December 31, 2017, has operations in the United States, Asia, Europe, and Latin America. Prudential's diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. For more information, please visit news.prudential.com.

Prudential Retirement delivers retirement plan solutions for public, private, and nonprofit organizations. Services include defined contribution, defined benefit and non-qualified deferred compensation recordkeeping, administrative services, investment management, comprehensive employee education and communications, and trustee services, as well as a variety of products and strategies, including institutional investment and income products, pension risk transfer solutions and structured settlement services. With more than 85 years of retirement experience, Prudential Retirement helps meet the needs of 4.2 million participants and annuitants. Prudential Retirement has $417 billion in retirement account values as of Sept. 30, 2017. Retirement products and services are provided by The Prudential Insurance Company of America (PICA), Newark, N.J., or its affiliates.

Reinsurance contracts are issued by either Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, Conn., or PICA. Both are wholly owned subsidiaries of Prudential Financial, Inc., and each company is solely responsible for its financial condition and contractual obligations. Neither PRIAC nor PICA is licensed or regulated by the U.K. Prudential Regulation Authority as an insurer or regulated by the Finanical Conduct Authority, nor does either conduct business in the United Kingdom or provide direct insurance to any individual or entity therein. Prudential Financial, Inc. of the United States is not affiliated with Prudential plc, which is headquartered in the United Kingdom.

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