Funded Reinsurance: A Well-Built Tool Under the Regulatory Spotlight

Helen Hallam (Partner, Eversheds Sutherland (International) LLP, London) |

What the PRA’s CP8/26 means for insurers and reinsurers, and why continental Europe should look past the headlines

Few reinsurance structures have attracted as much regulatory attention as funded reinsurance (also known as asset-intensive reinsurance). In the UK bulk purchase annuity (BPA) market, around 15% of new BPA business has recently been ceded through funded reinsurance, and UK insurers’ total exposure stands at roughly £40 billion (around 47 billion Euro). On 29 April 2026 the Prudential Regulation Authority (PRA) published Consultation Paper CP8/26, proposing a significant recalibration of its capital treatment.

For German life insurers, who have so far been cautious about the structure, the debate is a useful opportunity. Properly understood, funded reinsurance is a carefully engineered and heavily protected form of risk transfer, whose risks are identified, contractually managed and supervised.

How a funded reinsurance transaction works

In a