Rothesay Life to purchase Zurich’s legacy UK annuity business
- Rothesay Life reinsures £1.2bn of Zurich’s UK annuities, covering 28,000 members
- Individual policies to pass to Rothesay Life following Part VII Transfer
Zurich UK Life has signed an agreement to transfer its legacy portfolio of immediate annuities to Rothesay Life.
Under the terms of the agreement, Zurich UK Life has initially reinsured GBP 1.2 billion of annuities to Rothesay Life. Subject to UK Court approval and regulatory consultation, the parties then intend to transfer the annuities to Rothesay Life under a Part VII Transfer.
Zurich UK Life has not actively marketed its annuity business since 2005, choosing instead to focus on growing its core business. This transaction is in line with Zurich's current strategy of actively managing its business for value.
The completion of the Part VII Transfer involves a review process which includes close consultation with the regulators, the appointment of an independent expert to assess the likely impact of the Part VII Transfer on our policyholders and UK Court approval. This process is designed to ensure our customers are protected for the future.
Until the effective date of the Part VII Transfer, Zurich UK Life will continue to be responsible for the administration of the annuity policies and policyholders will remain customers of Zurich UK Life. After the Part VII Transfer is complete, the responsibility for policy administration will pass to Rothesay Life.
Gary Shaughnessy, CEO of Zurich UK Life said: “Zurich has not been active in the UK annuities market for some time. This transaction protects our customers, reduces our risk exposure and is aligned with our strategy of focusing our resources on pursuing sustained profitable growth".
“Rothesay Life is a specialist in the annuity market and we have followed a rigorous process to ensure we have chosen the right company for our customers”.
The transaction takes Rothesay Life’s 2015 new business premium received past £1.7bn for the year to date.
Commenting on the transaction Rothesay Life Chief Executive, Addy Loudiadis said: "Rothesay Life has proven its ability to acquire annuity business organically in the pensions market, through corporate acquisition and now with our latest transaction, through reinsurance and part VII Transfer".
“The deal continues an increasing trend of legacy annuity books transferring to specialists such as ourselves. We look forward to completing the transfer and providing Zurich’s policyholders a secure home.”
The annuity portfolio being transferred comprises around 28,000 policies. In 2007, Zurich UK Life transferred most of its legacy annuities held at the time to Windsor Life.
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Notes to editors
- A Part VII Transfer is a UK legal process under Part VII of the Financial Services and Markets Act 2000 which permits the transfer of insurance business, subject to the approval of the UK Court.
- In 2007, Zurich UK Life transferred GBP 3.9 bn of immediate annuities to Windsor Life Limited, comprising around 220,000 policies.
About Zurich in the UK
Zurich provides a suite of general insurance and life insurance products to retail and corporate customers. The UK General Insurance division supplies personal, commercial and local authority insurance through a variety of distribution channels. Zurich’s UK Life business* offers a range of personal protection, pensions and investment policies available through financial intermediaries. UK life also provides protection and pensions policies for the corporate market available through employee benefit consultants. Based at 21 locations all across the UK - with large sites in Birmingham, Cardiff, Farnborough, Glasgow, London, Swindon and Whiteley - Zurich employs approximately 7,000 people in the UK.
* *Zurich’s UK Life business is operated primarily through two entities: Zurich Assurance Ltd and Sterling ISA Managers Ltd. Zurich Assurance Ltd is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Sterling ISA Managers Limited is authorised and regulated by the Financial Conduct Authority.
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 £700m a year from over £16 billion of insurance contracts. In 2014, Rothesay Life received around £1.7 billion of bulk annuity premiums (2013: £1.6bn) and wrote seven deals over £100m, more than any other insurer in the sector. This strong growth has been achieved through the steady accumulation of pension scheme clients and significant strategic acquisitions.
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 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.
Rothesay Life is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.