Rothesay Life writes over £1bn of new business volumes in 2012
13th December 2012
Rothesay Life, the specialist provider of annuity-based solutions that insures the trustees and sponsoring employers of UK corporate pension funds against all or a portion of the risks associated with paying UK defined benefit pensions, announces that:
- Rothesay Life has written over £1 billion of new bulk annuity business in 2012
- Rothesay Life’s new business written to-date passed £10 billion, more than any other dedicated bulk annuity insurer
- Rothesay Life has entered into a £230 million bulk annuity transaction with the General Motors UK Retirees Pension Plan (the “GM UK Plan”), securing the pensions of all 11,000 members of the GM UK Plan
- Rothesay Life reports a strong pipeline of credible transaction opportunities, expected to produce a flow of new business to underpin its appetite for larger, more bespoke transactions
Rothesay Life’s growth has been founded on an innovative low risk approach to managing insurance risks that is well-suited to managing long term annuity risks. This has proved to be stable and resilient to market volatility in recent years and positions the business well for the introduction of the expected new Solvency II legislation.
Addy Loudiadis, CEO, Rothesay Life, said: “We are delighted to have exceeded £10bn of total business written since Rothesay Life was established in 2007. We focus on risk management in providing long term security to all our policyholders. In completing such transactions, we pride ourselves on providing good value to pension schemes and delivering what we commit to, through an efficient and transparent execution process. “We see continued strong demand from many pension funds for 2013 and beyond, in part driven by a current trend for funds to use their UK gilts to purchase bulk annuities. This switch allows them to pick up other protections, such as longevity risk removal and interest rate hedging, providing a closer match to liabilities with little impact on overall returns.”
Clive Wellsteed, Lane Clark & Peacock (adviser to the Trustee of GM UK Plan), said: “Rothesay Life ensured execution certainty for our client from the point they were selected as preferred provider through a competitive process run by Lane Clark Peacock. Key attractions of the solution included stable transaction economics for the Trustee and a clear process to deliver the desired commercial terms.”
For further information please contact:
Alex Child-Villiers or Alina Ulkina, Temple Bar Advisory Limited – Tel: +44 (0)20 7002 1080 or +44 (0)7795425580
About the Buy-in and the GM UK Plan
The GM UK Plan is one of three defined benefit pension plans of General Motors UK Limited.
Through the bulk annuity insurance policy (the “Buy-in”), Rothesay Life has agreed to insure all the risks associated with the payment of defined benefit pensions to all 11,000 members of the GM UK Plan. The administration and payment of pensions remains unaffected by this transaction.
The Buy-in policy was executed in a timely fashion to allow the GM UK Plan (and therefore General Motors UK Limited) to benefit from favourable pricing in the UK annuity market. Once selected, Rothesay Life used its access to hedging markets to allow the insurance premium it had quoted to track the value of the GM UK Plan’s assets for a period to ensure affordability was preserved. This gave the trustees a high degree of price certainty after choosing Rothesay Life.
About Rothesay Life
Now with over £10 billion of liabilities, Rothesay Life has grown since its establishment in 2007 as a leading provider of regulated insurance solutions in the market for pensions de-risking in the UK. Successful growth has come through the steady accumulation of pension scheme clients and the acquisition of competitor company, Paternoster in 2011.
The trustees of the GM UK Plan join existing Rothesay Life clients including the pension schemes and their members associated with such names as RSA, British Airways, P&O, Rank and Uniq.
Rothesay Life has been established to be a secure provider of pensions into the long term through its focus on:
- a flexible and committed approach to execution;
- ongoing risk management to maintain balance sheet strength; and
- robust operational processes.
Rothesay Life is wholly-owned by The Goldman Sachs Group Inc. It is separately capitalised under UK insurance regulation. Rothesay Life is authorised and regulated by the UK Financial Services Authority. www.rothesaylife.co.uk
LCP is a firm of financial, actuarial and business consultants, specialising in the areas of pensions, investment, insurance and business analytics.
LCP is a leading adviser in the pension buy-in and buy-out market. LCP’s landmark transactions include designing and implementing the first new-style pensioner buy-in in early 2007, advising Cable & Wireless on its £1 billion pensioner buy-in and advising on GlaxoSmithKline’s £900 million pensioner buy-in. In 2012 LCP has acted as lead adviser to four of the ten buy-ins and buy-outs over £100 million, including for the GM UK Plan and Tate & Lyle’s £347 million pensioner buy-in, the largest buy-in announced in 2012. During 2011, LCP was lead adviser to three of the five largest buy-ins and buy-outs including those for the Uniq plc Pension Scheme and the pension scheme of Home Retail Group.
The firm has more than 500 staff based at locations in London, Winchester, Brussels, Zurich, Basel, Utrecht, Dublin and Abu Dhabi. Please visit www.lcp.uk.com for further information. LCP is part of the Alexander Forbes group of companies, which employs over 4,000 people internationally. For more information on Alexander Forbes and its insurance, risk and financial services, please visit the website
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