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Rothesay acquires £6 billion Scottish Widows bulk annuity portfolio from Lloyds Banking Group

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13 March 2024

Rothesay, the UK's largest pensions insurance specialist, today announces that it has agreed to acquire the c.£6 billion Scottish Widows in-force bulk annuity portfolio from Lloyds Banking Group. The business to be transferred covers the pension benefits of c.42,000 people.

The transaction is in line with Lloyds Banking Group’s strategy of building a customer-focused digital leader and integrated financial services provider. It will enable Lloyds to focus on growing strategically 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 demonstrating the strength of its capabilities in this part of 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. It was purpose-built to secure the future for its policyholders and is trusted by the pension schemes of some of the UK’s best-known companies to provide pension risk transfer solutions along with award-winning levels of customer service.

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. 

Policies will continue to be serviced by Scottish Widows until the effective date of the Part VII transfer at which point they will begin to receive benefits in the normal way from Rothesay. Policyholders do not need to take any action.

The overall financial impact of this sale on Lloyds Banking Group is not material.

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 and 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 are able to 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 Insurance, Pensions and Investments at Lloyds Banking Group, said: “We’re on a mission to help people in the UK build financially secure futures, supporting the Group’s strategy of building a customer-focussed 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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