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Rothesay Acquires £6 billion Scottish Widows Bulk Annuity Portfolio from Lloyds Banking Group

Today, Lloyds Banking Group has agreed to sell the approximately £6 billion Scottish Widows in-force bulk annuity portfolio to Rothesay, the largest pensions insurance provider in the UK. About 42,000 people’s pension benefits are covered by the business that is being transferred.

The deal is consistent with the vision of Lloyds Banking Group to establish itself as an integrated financial services provider and digital leader with a customer-focused approach. Lloyds will be able to concentrate on expanding strategically significant business segments, including investments, retirement and pensions, insurance, and retirement planning, through both direct and intermediary channels. With the purchase of the Scottish Widows portfolio, Rothesay has now acquired six in-force annuities, highlighting its expertise in this area of the pension risk transfer market.

With more than £60 billion in assets under management, Rothesay distributes an average of £2.5 billion in pension benefits annually. It was created with the intention of protecting policyholders’ futures, and some of the most well-known corporations in the UK entrust their pension plans to it for award-winning customer care and pension risk transfer solutions.
A Part VII process is scheduled for next year, and the deal is originally structured as a reinsurance agreement for the active bulk annuity portfolio, pending regulatory approval.

Scottish Widows will continue to serve the policies until the Part VII transfer takes effect, at which point they will start receiving payouts from Rothesay normally. Policyholders are not required to do anything. The sale has no appreciable financial impact on the Lloyds Banking Group overall.

Tom Pearce, Chief Executive Officer at Rothesay, mentioned saying “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.”

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