Prudential Financial, Inc. and Warburg Pincus have announced the launch of Prismic Life Reinsurance, Ltd, a licensed Class E Bermuda-based life and annuity reinsurance company.
A group of global investors, along with Prudential and Warburg Pincus, have agreed to make an initial equity investment in the reinsurer of $1 billion.
The two companies will initially own 20% and 15% of the equity in Prismic, respectively. Prismic’s board will include two independent directors and one director nominated by each of Prudential, Warburg Pincus, and the group of investors.
Agam Capital, an analytics-driven platform is advising Prudential in the formation and launch of Prismic. The strategic engagement leveraged Agam’s pALM analytical platform and differentiated capabilities to support the development and establishment of the new entrant. PGIM and Warburg Pincus will provide asset management services to Prismic.
Prismic is expected to reinsure to a block of structured settlement annuity contracts with reserves of approximately $10 billion, subject to the receipt of required regulatory approvals.
Prudential’s obligations to the holders of these annuities will remain unchanged with Prudential continuing to administer the contracts. Prudential aims for Prismic to be a strategic reinsurance partner to grow their reinsurance relationship materially in years to come.
Charles Lowrey, Chairman and CEO of Prudential Financial, Inc., commented, “This unique reinsurance platform will play an important role in our vision to be a global leader in expanding access to investing, insurance, and retirement security for people around the world.
“Prismic will enhance our ability to address the evolving needs of our insurance customers and clients while continuing to meet our obligations to policyholders. It represents a formidable combination of industry-leading expertise, global capabilities, and the backing of two of the world’s leading insurance and asset management firms.”
Prismic will leverage PGIM’s and Warburg Pincus’ global investment management capabilities, and will become a client of PGIM Portfolio Advisory, a newly established affiliate within PGIM.
Chip Kaye, CEO, Warburg Pincus, said, “Warburg Pincus is thrilled to enter into this strategic partnership with Prudential in the creation of Prismic.
“The combination of Prudential’s significant in-force and new business origination capabilities, PGIM’s expertise in public fixed income, private credit, and real estate with our private markets investment capabilities presents Prismic with a unique opportunity for future, sustainable growth.
“Prismic’s strategy of enhancing long-term investment returns through an end-to-end ecosystem of liability origination, asset-liability management, and asset management clearly aligns with our focus on long-term fundamental value creation. We look forward to the partnership with Prudential and the success of Prismic.”
Amy Kessler, a founding leader of Prudential’s international reinsurance business, has been appointed as the Chief Executive Officer.
Nandini Mongia, President of Prudential’s Open Architecture Solutions, will represent the company on Prismic’s board. Most recently, she served as Prudential’s treasurer. Mike Thompson, Managing Director, will represent Warburg Pincus on Prismic’s board.
Agam’s Co-Founders, Chak Raghunathan and Avi Katz added, “The launch of Prismic is a milestone event in the continued growth of the Bermuda reinsurance market. We are thrilled to have been a key part of PFI’s strategic process in the exploration, diligence and launch of Prismic and are excited for our future engagement working with Prismic CEO Amy Kessler and her team to continue to build Prismic into one of the leading Bermuda-based reinsurance platforms.”
Robert Falzon, Vice Chair of PFI, said, “Agam played a critically important role in the creation of Prismic, providing third-party integrated asset, liability, capital, and risk analytical tools that greatly facilitated decision-making throughout the process. We are excited that Agam will partner with Prismic going forward to enable the platform to grow, and in support of PFI’s vision to be a global leader in expanding access to investing, insurance, and retirement security.”
