Prudential Retirement has announced a transaction with Rothesay Life that will provide reinsurance of longevity risk to eight pension schemes.

Prudential Retirement has announced a transaction with Rothesay Life that will provide reinsurance of longevity risk to eight pension schemes.

The transaction covers longevity risk associated with pension liabilities of USD 450 million (GBP288 million) for approximately 25,000 pensioners and deferred members in the UK.

It is the fifth reinsurance with Prudential Retirement since 2011 and the second in the last few months.

Amy Kessler, senior vice president and head of longevity reinsurance at Prudential, said the deal represents a wider trend for de-risking.

"The strong partnership between Rothesay and Prudential supports the growing pension de-risking trend in the UK and ensures that there is capacity for pension schemes seeking to de-risk," she said.

"Today's transaction is another example of Rothesay's leadership in the thriving UK market."

The transaction follows the company's August announcement of a USD 1.7 billion (GBP 1 billion) transaction covering 20,000 annuitants and a "groundbreaking" agreement in July to reinsure USD 27.7 billion of longevity risk associated with BT Pension Scheme liabilities.

"We are pleased that Rothesay continues to choose and trust us to help secure the retirement benefits for thousands of pensioners," said David Lang, Director, Pension Risk Transfer Actuary for Prudential Retirement.

Tom Pearce, managing director of Rothesay Life, added: "This latest transaction is a further example of Rothesay Life's commitment to its pensioners. We're delighted to build upon our partnership with Prudential as we continue to focus on delivering a secure retirement for our annuitants."

Prudential Retirement delivers retirement plan solutions for public, private, and non-profit organisations and its services include defined contribution and defined benefit.

Rothesay Life was established in 2007 and more than GBP 15 billion of insurance contracts.

The company's clients include pension schemes and members associated with RSA, British Airways, Rank, Uniq, General Motors, the Merchant Navy Officers Pension Fund), InterContinental Hotels, Philips and GKN.

First published 22.01.2015

Lindsay.sharman@wilmington.co.uk