PIC eyes liability pipeline of £40bn

Pensions Insurance Corporation (PIC) has roughly £40bn of pensions liabilities waiting to transact, it has revealed.

In an update on its half year results published today, 12 July, the insurer said that it conducted nine new business transactions with total premiums of £6bn over H1 2019.

According to its results published on 24 June, PIC concluded £5.8bn of buyouts and buy-in of defined benefit pensions, including £1.5bn of deferreds.

Commenting on the results, PIC chief executive officer, Tracey Blackwell, said: “The business has had an excellent first half, with record new business in the period and record levels of longevity reinsurance undertaken.

"A key focus for the business in the next few months will be investing the proceeds of our new business, which will generate further profitability and enhance the value of the business.

“The pipeline of new business opportunities is exceptionally strong, and we expect a busy second half of the year.”

Furthermore, the insurer held £39.6bn in financial investments as of H1 2019, compared to £31.4bn held at the same time last year.

Blackwell added: “We continue to be selected by trustees not only on our ability to offer flexible products that meet the needs of trustees, as well as pricing, but also on our customer service for policyholders.”

Deals include two buy-ins with Marks & Spencer totalling around £1.4bn; a full buy-in with the trustees of Dresdner Kleinwort Pension Plan worth £1.2bn and a further £3.3bn of new business with unnamed pension schemes.

The group has reinsured over 70 per cent of its total longevity exposure. It completed £5.6bn of longevity reinsurance in 2018.

In March, PIC said it recorded a profit of £477m before tax in 2018.

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