Prudential Financial Inc. unit Prudential Retirement and Pension Insurance Corp. Plc have developed an approach for expediting longevity reinsurance transactions for smaller pension buy-ins and buy-outs that meet pre-agreed criteria.
These blocks will be reinsured by Prudential Financial at the model-determined price.
The flow reinsurance structure can increase primary insurers' capital efficiency and cut the administrative burden for both the primary insurer and the reinsurer, according to a news release.
The approach combines an advance commitment of capital, known pricing and the bundling of multiple transactions into a single closing. Prudential Retirement said it will allow Pension Insurance to efficiently address the risk transfer needs of small pensions and their retirees.