Prudential and Aviva Reach $1.4 Billion Longevity Reinsurance Agreement

The Prudential Insurance Company of America (PICA) and Aviva PLC have reached their first longevity reinsurance transaction, establishing a new reinsurance relationship between these two market leaders. In the agreement, PICA assumes the longevity risk for nearly $1.4 billion (approximately £1 billion) in pension liabilities.

The transaction highlights the surging demand for pension de-risking solutions in the U.K., and the desire of many U.K. pension insurers to manage their risks and capital using longevity reinsurance. Demand is also being driven by the increasing affordability of pension risk transfer, reflecting attractive pricing and the enhanced capacity of insurers, as well as the improved finances of U.K. schemes, many of which are approaching full funding.

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