Aviva announced today (17 October) a £600m bulk annuity deal with The Pearson Pension Plan.
According to the provider, this is its largest bulk purchase annuity deal to date.
The buy-in transaction covers the liabilities of around 2,400 members.
Aviva said this deal builds on the “important existing relationship” that the provider has with the pension plan and its sponsoring employer, Pearson, for which it provides corporate pensions, group protection and health insurance.
The insurer was chosen after a bidding process led by LCP on behalf of the plan’s trustee.
Members of plan will see no change in the amount of their benefits or the way in which they are paid as a result of the transaction, Aviva said.
Despite a fall in sales in the UK annuity market from around £11bn, prior to the introduction of pension freedoms in 2015, to around £4bn in 2017, Aviva is still betting on this area.
The provider “has identified bulk annuities as a significant growth opportunity for its UK and Irish business,” and is well placed to grow due to its “investment capabilities and strong balance sheet,” it said.
During 2017, Aviva has expanded its bulk annuity team adding over thirty new members of staff, as it competes for larger bulk annuity transactions.
Aviva recently appointed Tom Ground, who previously led Legal & General’s bulk annuity business, as managing director of defined benefit (DB) solutions.
According to Andy Briggs, chief executive officer of Aviva UK Insurance, the insurer is “continuing to see very strong demand for bulk annuity deals,” as more and more trustees look to find the right solution to manage their DB pension schemes.
He said: “With the recent expansion of our bulk annuity team, we’re in great shape to push ahead for further growth.”
maria.espadinha@ft.com
