Pension Insurance Corporation (PIC) has de-risked £1bn of its liabilities after striking a deal with one of the world’s largest insurers, SCOR.
The agreement covers the longevity increases of around 7,000 members and their spouses. These are members of six defined benefit (DB) pension schemes that PIC completed buy-ins of last year.
PIC has now reinsured more than 70% of its longevity exposure, up from 68% last year. Following this latest deal, SCOR has become PIC’s eighth longevity swap reinsurance counterparty.
PIC’s head of longevity, Khurram Khan, said a benefit of the deal is that it has released regulatory capital. “We have also acquired a new reinsurance partner thereby helping to widen out counterparty relationships under these very long-term contracts.”
PIC had insured £22.6bn of pension scheme liabilities by the end of 2016. Buy-ins this year have included a £200m deal with the pension scheme of 3i and a £130m agreement with engineering group TI as well as a fifth deal with foundry-focused engineer Vesuvius.
