Rothesay Life’s 2015 Full Year Financial Results and Business Highlights

11 April 2016

 

Rothesay Life[1] was established in 2007 and has become one of the leading providers of regulated insurance solutions in the UK market for pensions de-risking. Today the company announces its audited results and business highlights for the year ending 31 December 2015.

 

Financial Highlights

A robust capital position, disciplined new business underwriting and cautious approach to investment have helped Rothesay Life deliver an excellent set of results for 2015 and leave the company well-positioned to take advantage of future growth opportunities.

  • Generated record IFRS pre-tax profits of £347m, an increase of 42%
  • Originated total new business volume of £3.5bn, which included £1.2bn of back-book reinsurance transactions in addition to our regular bulk annuity business
  • Economic capital increased by £456m to £2.0bn providing 191% coverage[2]. Solvency II capital ratio of 158%
  • Total benefit payments to policyholders of £902m in 2015 and the company now insures benefits for 227,160 individuals
  • Assets under management increased 20% from £12.8bn to £15.4bn[3]
  • Market Consistent Embedded Value (MCEV) of £1,445m, an increase of 19%

 

Business Highlights

  • Diversified growth: Completed successful reinsurance of £1.2bn of in-force individual annuities business from Zurich UK Life, opens a new source of business origination
  • Maintained low-risk investment and longevity hedging strategy: Combined with disciplined underwriting, sustained a high economic capital coverage ratio of 191%
  • Further longevity risk hedging: Executed £2.4bn of longevity reinsurance hedges, taking the total to 77% reinsured
  • Operational excellence: Completed Part VII transfer of MetLife Assurance acquired in 2014 and 97% of customer survey respondents rated our service as “good” or “excellent”
  • Industry Recognition: Winner of 2016 Risk Reduction Provider award from Pensions Age
  • Building scale and expertise: Established new headquarters and increased headcount by 22 to 100
  • Chairman Succession: Keith Satchell, who has been chairman since the business was founded, has retired and been succeeded by Raymond King as independent non-executive Chairman. Bill Robertson has also joined the board as an independent non-executive director
  • Robust capital position: Well-placed under Solvency II with 158% SCR Cover and benefiting from Matching Adjustment and Transitional Measures approvals

 Commenting on Rothesay Life’s results Addy Loudiadis, Chief Executive Officer, said: Rothesay Life has delivered a record year for organic new business growth and profits against a backdrop of Solvency II uncertainty in 2015 for the industry. We have remained cautious with our investment strategy and been very selective in underwriting.

She added: “The reinsurance transaction with Zurich underlined our ability to respond to market demand as we open another source of new business. We believe that the trend of multi-line insurers looking to reduce their exposure to annuities will continue and provide further opportunities for us to accumulate assets and grow the business.

“The bulk annuity and pension buy-out markets present a significant structural growth opportunity, with corporates looking to remove pension liabilities from the balance sheet and trustees trying to secure future payments for their members. Our business is well-positioned from a capital, financial and operational perspective, and I am confident that we will continue to deliver strong growth in the future.”

  

Contact details

 

Temple Bar Advisory

Alex Child-Villiers or William Barker 020 7002 1080

 

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 £900m a year from £20 billion of insurance contracts. This strong growth has been achieved through the steady accumulation of pension scheme clients and significant strategic acquisitions.

Existing Rothesay Life clients include Zurich UK Life and 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, CAA and GKN.

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.


1.  Rothesay Life plc (previously Rothesay Life Limited) is the regulated insurance company within the Rothesay Holdco UK Limited group.  The results set out in this document are for the Rothesay group.

2.  Economic capital represents management’s internal calculation of the capital resources available above best estimate liabilities to cover risk-based capital.

3.  Post payments of benefits and dividends