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Policyholders transferred

187,000

Value

£6.4bn

Type

Part VII transfer

Impact

  • Mechanisms for collateral and swaps to ensure compliance with matching adjustment tests in the event of recapture before conclusion of Part VII transfer
  • Reinsurance arrangements allowed continued coverage in the event of recapture before conclusion of Part VII transfer
  • Solvency boost for Aegon

  • Annuities are a capital-intensive business under Solvency II. We knew there was a competitive market, and saw an opportunity to de-risk. [Rothesay] was crystal clear about what it could and couldn’t do. It felt like they had thought everything through and showed real expertise on the risks of an insurance-to-insurance transfer under Solvency II.

    STEPHEN MCGEE, AEGON UK’S CHIEF FINANCIAL OFFICER

Highlights

  • Solvency boost for Aegon facilitated their exit from UK annuities
    The transaction improved Aegon’s UK solvency ratio by c. 20%.
  • Significant amount of longevity risk reinsured pre execution
    Reinsurance designed to maintain coverage in the event of recapture before conclusion of Part VII transfer.
  • Economic terms locked in up front
    Using a roll forward allowed the terms and capital release of the transaction to be locked in.

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