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Rothesay acquires £6b Scottish Widows bulk annuities from Lloyds

By Gloria Methri

March 14, 2024

  • Acquisition News
  • Annuity
  • Europe
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Rothesay, Insurance, Scottish Widows, Lloyds Banking Group, Pensions, Investments, FinTech, Acquisition, UK Rothesay, the UK-based pensions insurance specialist, is set to acquire the £6 billion Scottish Widows in-force bulk annuity portfolio from Lloyds Banking Group. The business to be transferred covers the pension benefits of 42,000 people.

The transaction will enable Lloyds to focus on growing important lines of business such as insurance, investments, retirement, and pensions, through direct and intermediary channels.

The acquisition of the Scottish Widows portfolio represents Rothesay’s sixth acquisition of in-force annuities, further strengthening its capabilities in the pension risk transfer market.

Rothesay has over £60 billion in assets under management and pays out, on average, £2.5 billion in pension payments each year. The transaction, which is subject to regulatory approval, is initially structured as a reinsurance agreement for the in-force bulk annuity portfolio, with a Part VII process to follow next year.

Scottish Widows will continue to service policies until the effective date of the Part VII transfer. At that point, policyholders will begin to receive benefits in the normal way from Rothesay.

Tom Pearce, Chief Executive Officer at Rothesay, said, “I am delighted that Lloyds Banking Group has chosen Rothesay as the long-term home for its bulk annuity business. I look forward to welcoming our new policyholders from Scottish Widows. Rothesay’s substantial capital resources combined with the proven strength of our execution capabilities mean we can deliver solutions for our clients across all areas of the pension de-risking market. We are proud to provide award-winning levels of customer service for our policyholders along with long-term security for their retirement.”

Chira Barua, CEO of Scottish Widows and CEO of Insurance, Pensions, and Investments at Lloyds Banking Group, said, “We are on a mission to help people in the UK build financially secure futures, supporting the Group’s strategy of building a customer-focused digital leader and integrated financial services provider. This sale will enable us to focus and invest in the insurance, pensions, investments, retirement, and protection markets where we want to grow whilst ensuring positive outcomes for our Bulk Annuities customers.”

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