(Bloomberg) — Prudential Financial Inc. agreed to provide reinsurance on an annuity portfolio at Legal & General Group Plc, guarding the U.K. company against the risk that pension beneficiaries live longer than expected.
The contract covers about 1.35 billion pounds ($2.2 billion) of bulk annuities, the companies said today in a statement that didn’t disclose terms. London-based L&G had about 24.6 billion pounds in bulk annuity assets as of June 30, according to the statement.
Prudential, the second-largest U.S. life insurer, has assumed pension obligations from firms including General Motors Co., Verizon Communications Inc. and Bristol-Myers Squibb Co. The Newark, New Jersey-based company has also taken on risks tied to retiree liabilities at BT Group Plc, the former U.K. phone monopoly.
The L&G deal “underscores our proven ability to tailor reinsurance solutions for the largest and most sophisticated pension insurers in the world,” Bill McCloskey, a vice president of longevity insurance for Prudential, said in the statement.