On the go: The Pension Insurance Corporation has finalised a £1.2bn longevity reinsurance contract with independent global reinsurance company SCOR.
The agreement covers the longevity risk for around 8,000 in-payment lives and, where applicable, their spouses, across six separate defined benefit pension schemes. It builds upon a similar £1bn reinsurance contract executed in 2017.
Rupen Shah, global head of longevity at SCOR, said: “We are extremely pleased to have supported Pension Insurance Corporation in its continued efforts to help improve the security of retirees’ pensions.”
Khurram Khan, head of longevity risk at PIC, said: “As UK bulk annuity market volumes continue to increase, reinsurance transactions need to become smoother and offer wider coverage. It is pleasing to see our reinsurance partners responding to these changing demands.”
PIC’s longevity reinsurance business volumes for 2018 currently exceed £4bn and are expected to exceed a record £5bn by the end of the year.
The company has reinsured more than 70 per cent of its total longevity exposure and has now signed treaties with eleven reinsurance counterparties.
Pension Insurance Corporation wrote its first longevity reinsurance contract in 2008.
Demand to reinsure longevity risk is likely to increase in line with the rising demand for buyouts and buy-ins and Solvency II concerns for insurers.
