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Prudential Financial unit completes $2.9 bln longevity deal for L&G

Reuters - UK Focus

LONDON, Aug 20 (Reuters) - A unit of U.S (Other OTC: UBGXF - news) . insurer Prudential (Amsterdam: PD8.AS - news) Financial said on Thursday it had completed a $2.9 billion longevity deal for British insurer Legal & General (LSE: LGEN.L - news) .

Prudential Retirement Insurance and Annuity company said it was reinsuring the longevity of retirees insured by L&G's bulk annuity business.

In a bulk annuity transaction, an insurer takes on some or all of the risk of a company defined benefit, or final salary, pension scheme. Reinsuring against longevity helps insurers manage the risk that retirees live longer than expected.

Prudential (HKSE: 2378.HK - news) reinsured 1.35 billion pounds ($2.11 billion) of Legal & General's bulk annuity portfolio last year.

L&G said this month that it was using structures such as longevity deals to reduce the capital costs of its annuity business.

($1 = 0.6390 pounds) (Reporting by Carolyn Cohn; editing by Jason Neely)