PensionsAug 14 2017

Legal & General eyes Prudential's annuity business

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Legal & General eyes Prudential's annuity business
ByMaria Espadinha

Legal & General (L&G) will consider buying Prudential’s £10bn annuity business if it comes to market.

Prudential, which announced last week the merger of its UK asset management arm, M&G, with its European insurance unit, might also consider selling its annuity back-book.

A spokesperson at L&G said that there is no formal process underway for the life company to snap up its rival's pension book.

However, they added: “L&G as made it very clear in its earnings call that they are interested when back-books come to the market."

In a statement on 9 August, during its half-year returns presentation, the company pointed to the reason it may seek to grow by acquisition.

“The combination of Freedom & Choice in Pensions and Solvency II has resulted in consolidation among individual annuity providers.

"We expect there to be further back-book consolidation opportunities over time and we will consider these as and when they arise,” a document disclosed.

Last year, L&G acquired ­Aegon’s annuity portfolio for £3bn.

This is not the first time that there has been talks about Prudential selling its annuity back-book.

Last year, the insurer hired Clare Bousfield, who orchestrated a £9bn divestment of Aegon's retirement annuities business, and began a search for buyers.