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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