PIC insures £7bn longevity risk in H1 2019

The Pensions Insurance Corporation (PIC) has insured £7bn on longevity risk in the first half of 2019 as the market signals increased capacity, it has revealed.

The insurer said it has concluded £5.8bn of buyouts and buy-ins of defined benefit pensions including £1.5bn of deferreds.

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.

PIC chief origination officer, Jay Shah, commented: “This has been a record-breaking first half for PIC both in terms of the amount of new business transacted and longevity risk re-insured. On the longevity reinsurance we are especially pleased to have insured such a large amount of deferred lives.

“This is a significant development for the reinsurance market, where we are now starting to see the standardisation of these types of deals, which we have had for several years for pensioner deals."

According to the insurer, the £7bn of reinsurance deals covers members associated with pension schemes PIC has insured in 2019.

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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