Aegon is selling two-thirds of its UK annuity portfolio to specialist insurer Rothesay Life for an undisclosed sum.
The deal will see Aegon reinsure £6bn worth of liabilities to Rothesay Life, with the transfer process taking place over the next two years. Aegon will continue to make annuity payments to customers on behalf of Rothesay during this time.
Aegon expects the reinsurance deal to lead to a loss of around £30m, which will be reflected in the providers Q2 results. Following the transaction, Aegon says cashflows from its UK operations to be reduced by around £35m.
The provider says the annuity portfolio sale will allow it to focus on its platform. It adds it has not been an active player in the UK annuity market since 2010.
Aegon plans to sell off the remaining stake in its annuity book in due course.
Aegon UK chief executive Adrian Grace says: “Following a review of our annuity portfolio last year we are delighted to announce the sale of the majority of our annuity book.
“The sale marks a huge milestone for Aegon and today’s deal gives us the impetus to continue growing our platform and protection business.”
Last year Zurich UK Life transferred its £1.2bn legacy annuity book to Rothesay Life, while MetLife UK sold its bulk annuity business to the specialist insurer in 2014.