Prudential Financial and private equity firm Warburg Pincus have launched Prismic Life Reinsurance company in Bermuda, in conjunction with a group of investors, in order to target the structured settlement annuity market.
Prismic Life is a licensed Class E reinsurer and, in a press release announcing the move, Prudential said that it expects to reinsure blocks of structured settlement annuity contracts against roughly $10bn of capital reserves.
The New Jersey-based insurers said that Prismic is intended to be a strategic reinsurance partner for the firm and PGIM and Warburg Pincus will provide asset management services to the reinsurer.
The company launch is subject to regulatory approval.
A group of global investors has agreed to make equity investments in Prismic, in addition to Prudential and Warburg Pincus, giving the newly minted reinsurer a combined initial equity investment of $1 billion.
Prudential and Warburg Pincus will initially own 20% and 15% of the equity in Prismic, respectively.
Prudential and Warburg’s move follows on from Fidelity, the world’s third largest asset manager, announcing in July that it was also setting up a Bermuda-based insurer to target the same market.