July 14, 2024

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Prudential Financial finalizes reinsurance transaction with Somerset Re

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Prudential Financial finalizes reinsurance transaction with Somerset Re | Insurance Business America

Deal involves portion of guaranteed universal life block

Prudential Financial finalizes reinsurance transaction with Somerset Re


Kenneth Araullo

Prudential Financial has officially completed a major reinsurance transaction with Somerset Re involving a portion of its guaranteed universal life insurance block.

Initially unveiled on July 24, 2023, this move, Prudential explained, aligns with its strategic efforts to mitigate market sensitivity and enhance capital efficiency. The financial outcomes stemming from this transaction are anticipated to align with projections shared in the original July 2023 announcement.

This reinsurance agreement also marks a pivotal step for Prudential Financial as it undergoes efforts to optimize its portfolio and financial standing. By transferring some of the risks associated with its guaranteed universal life insurance policies to Somerset Re, Prudential says that it aims to achieve a more stable and efficient capital structure.

The company expects that the reinsurance deal will not only help in managing its exposure to market fluctuations but also boost its financial resilience. As per its 2023 financials, Prudential Financial finally made it back in the black following a net loss of $1.647 billion in 2022.

Prudential Financial’s second major reinsurance deal in months

This finalized deal with Somerset Re is the second major reinsurance agreement made by Prudential Financial in recent months. Back in December, the firm announced its subsidiary’s entrance into a significant longevity risk transfer agreement with NN Life.

This $9.2 billion agreement involves the reinsurance of over 200,000 policies under The Prudential Insurance Company of America and represents Prudential’s inaugural venture into the Dutch market for international longevity reinsurance.

Somerset Re developments

Outside of this reinsurance transaction, Somerset Re has also announced recent developments for its business operations. In February, the Bermuda-headquartered firm confirmed the appointment of Thomas Porter as its new chief underwriting officer.

Earlier this year, it also named Manisha Dias as the head of new business development, a role responsible for steering the company’s commercial strategies.

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