Pacific Life Re announces longevity deal with Abbey Life
Pacific Life Re, the US specialist life reinsurer, has secured a £1.5 billion longevity contract with Abbey Life, the UK closed life insurer.
Another reinsurer is involved in the transaction but has not been named.
Abbey Life continues to manage £12 billion of assets with regard to around 1.2 million policies, although the company has been closed to new business since 2000, and the deal relates to a portfolio of in-payment annuities with underlying liabilities of £1.5 billion.
Commenting on the agreement, Pacific’s chief executive, David Howell, explains that “reinsurance solutions of this type, involving the transfer of pure longevity risk, require substantial technical expertise and careful structuring”.
Mr Howell adds that the Abbey deal is “truly exceptional” because of its scale and that he is therefore hopeful that it will highlight the key role “well-executed reinsurance solutions can play in helping insurers manage risk and capital associated with their annuity business”.
On Abbey’s part, the move forms part of a strategy to reduce risk and protect the solvency of the company.
Category: Companies News, Insurance News, Life Insurance News
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