Zurich UK Life has signed an agreement to transfer its legacy portfolio of 28,000 individual annuities comprising liabilities of £1.2bn to Rothesay Life.
Under the terms of the agreement, Zurich has initially reinsured the annuities with Rothesay. Following this and subject to UK Court approval and regulatory consultation, ownership of the policies will be switched under a Part VII Transfer.
This involves a review process with close regulatory consultation and the appointment of an independent expert to assess the likely impact on policyholders, to ensure customers are protected for the future.
Until the effective date of the transfer, Zurich will continue to be responsible for the administration of the annuity policies and policyholders.
It has not actively marketed its annuity business since 2005, choosing instead to focus on growing its core divisions. In 2007, Zurich transferred most of its legacy annuities held at the time to Windsor Life.
Gary Shaughnessy, chief executive of Zurich UK Life, explained that the transaction protects customers, reduces risk exposure and is aligned with a 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”.
Addy Loudiadis, chief executive at Rothesay Life, said that the deal continues an increasing trend of legacy annuity books transferring to specialists. The transaction takes their 2015 new business premium received past £1.7bn for the year to date.
peter.walker@ft.com
