The Pensioneer Trustee Company (Guernsey) Limited


L&G reinsures £1.9bn of longevity risk

August 20, 2015

Legal and General (L&G) has reinsured longevity risk relating to $2.9bn (£1.9bn) of pension liabilities in its bulk annuity business through Prudential Retirement Insurance and Annuity Company.

It is the reinsurer's second longevity hedging transaction with L&G after completing a deal covering £1.35bn of liabilities last October.

Prudential's longevity reinsurance vice president Bill McCloskey said: "We're pleased that Legal & General has offered us an opportunity to partner with them again to help solve pension challenges."

He said that the impact of longevity on pension schemes was a global issue that affected employees and employers.

"This latest transaction demonstrates the capacity we have as a reinsurer to support the pace of the market in the UK, which remains very active," he added.

As bulk annuity providers like L&G take on a growing amount of longevity risk, they often look to transfer it to other parties through longevity swaps or reinsurance.

In June Prudential reinsured longevity risk relating to £1.6bn of bulk annuity liabilities insured by Pension Insurance Corporation.

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The Pensioneer Trustee Company (Guernsey) Limited is licensed by the Guernsey Financial Services Commission under The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000 and subject to The Pension Licensees (Conduct of Business) & Domestic and International Pension Scheme and Gratuity Scheme Rules (No.2) 2017.