The Prudential Insurance Company of America recently completed
what is believed to be the largest longevity risk transfer
transaction to date, having reinsured longevity risk of the BT
Longevity risk is faced by all providers of defined benefit
pension schemes and has been the subject of a number of deals as
schemes have sought to reduce the risk of people living longer.
Increased life expectancy increases the liabilities associated with
a defined benefit pension scheme. The Prudential Insurance Company
of America, a subsidiary of Prudential Financial, Inc. (NYSE: PRU)
entered into the reinsurance transaction with the Guernsey based
captive insurer of the BT Pension Scheme, effecting the transfer of
a quarter of the scheme's exposure to increasing longevity and
so hedging around $16 billion of liabilities.
Ogier Legal advised Prudential in Guernsey.
Ogier Partner William Simpson said: "We have participated in a
number of high profile insurance transactions recently and Guernsey
is clearly regarded as the jurisdiction of choice for higher value
and more complex arrangements. Law firms, accountants and
especially the managers locally have developed considerable skill
over many years in this area. We were delighted to be
Guernsey is a major centre for the provision of insurance
products and services. The Island's first captive insurance
company was incorporated in 1922. Since then, Guernsey has grown to
become the leading captive domicile in Europe and the fourth
largest captive domicile in the world.
The Ogier deal team who advised The Prudential Insurance Company
of America was led by William Simpson and Managing Associate Bryon
Rees, with assistance from Michaela Jesson and Bourn
Primary transaction counsel for The Prudential Insurance Company
of America were Willkie Farr & Gallagher LLP and Clifford
Prudential Financial, Inc. of the United States is not
affiliated with Prudential plc, which is headquartered in the
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