Rothesay Life's 2016 Full Year Financial Results and Business Highlights
20 April 2017
Rothesay Life is one of the leading providers of regulated insurance solutions in the UK market for pension schemes and other insurers. Today the company announces its audited results and business highlights for the year ending 31 December 2016.
- Disciplined underwriting and a strong risk management framework have helped Rothesay Life deliver record results for 2016.
- New business volumes increased by 89% to £6.6bn, which included the £6.4bn back-book reinsurance transaction with Aegon
- Assets under management grew 54% from £15.4bn to £23.7bn
- IFRS pre-tax profits of £328m, a strong result in volatile markets
- Solvency II Own Funds in RLP increased by £1.0bn to £2.8bn providing a Solvency II capital ratio of 177% (up from 158% in 2015)
- Total benefit payments to policyholders of £1.3bn in 2016 and the company now insures benefits for over 380,000 lives
- Market Consistent Embedded Value (MCEV) of £2,173m, an increase of 50%
- Largest transaction: Acquired £6.4bn annuity portfolio from Aegon through reinsurance covering 187,000 policyholders. This is Rothesay’s largest transaction to date, one of the largest transactions of its type to be completed in the UK and the first such transaction since the implementation of Solvency II
- Secure Investments: Continued to expand market leading capabilities in sourcing and investing in low-risk, secured assets to back annuity liabilities. In 2016 Rothesay further diversified sectors including extending mortgages to older borrowers through the equity release mortgage market and lending against prime commercial real estate assets
- Building scale and broadening expertise: Increased headcount by nearly 40% to 139 and extended headquarters floor space to support continued expansion and further growth prospects
- Operational excellence: 98% of customer survey respondents rated our service as “good” or “excellent” and our complaints ratio is close to the lowest in the industry reflecting a relentless approach to operational care
- Industry Recognition: Winner of 2016 Risk.net Insurance Company of the Year award
Commenting on Rothesay Life’s results Ray King, Chairman, said: “Rothesay Life had an excellent year in 2016, delivering record growth amidst the market volatility driven by a changing political landscape and continued adjustment to Solvency II which undoubtedly made for a challenging environment.”
“We expected Solvency II to become a source of new business as multi-line insurers look to reduce their exposure to annuities, and were pleased to complete the £6bn Aegon transaction.”
“The bulk annuity and pension buy-out markets continue to present a significant structural growth opportunity. We expect the high-profile challenges for defined benefit pension schemes highlighted over the past 12 months combined with a backdrop of rising interest rates are likely to make these transactions more attractive to companies as they look to remove pension risk.
With the breadth of expertise within our team, our excellence in delivery, strong capital base and supportive shareholders, we are very well positioned to continue our growth and deliver security for all our stakeholders”
- Rothesay Life plc (RLP) (previously Rothesay Life Limited) is the regulated insurance company within the Rothesay Holdco UK Limited group.
- Solvency II Own Funds and coverage ratios are calculated net of transitional amortisation. We estimate that the impact of re-calculating transitional solvency relief as at 31 December 2016 would be to reduce the SCR coverage to 173% at RLP and 157% at RHUK
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About Rothesay Life
Rothesay Life was established in 2007 and has become one of the leading providers of regulated insurance solutions in the UK market for pensions de-risking, making payments of around £1.3bn a year from over £22 billion of insurance contracts. This strong growth has been achieved through the steady accumulation of pension scheme clients, significant strategic acquisitions and the reinsurance of in-force annuity portfolios.
Existing Rothesay Life clients include the pension schemes and members associated with such names as RSA, British Airways, Rank, Uniq, General Motors, the MNOPF (Merchant Navy Officers Pension Fund), InterContinental Hotels, Philips, GKN, Lehman Brothers, Zurich Assurance and the Civil Aviation Authority.
Rothesay Life is a secure long-term provider of pensions, focused on
- a flexible and committed approach to execution;
- ongoing risk management to maintain balance sheet strength; and
- robust operational processes.
Rothesay Life is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.