Insurer Rothesay Life is backing the bulk annuity market to drive future growth after buying a £12bn annuity portfolio from Prudential last year.
In a trading update today, Rothesay Life says it has focused in the first half of this year on deploying the Prudential assets and “capitalising on the opportunities in the bulk annuity market”.
The entire £12bn has now been deployed, Rothesay confirms. Alongside new business premiums for de-risking projects with defined benefit pension schemes of £0.7bn, the move has helped drive first half profits of £403m.
The results read: “The new business pipeline is very strong. As usual, where we are successful in writing new business, we will remain patient in asset origination which may in turn impact short term IFRS profit performance ahead of anticipated longer term gains.”
As at 30 June 2019, the group’s assets under management were £37.7bn.
In December, Rothesay announced that annuity customers transfered through previous deals with Aegon and Zurich would be allowed to trade in their annuity for a cash sum.
The move follows other providers like Phoenix, which allowed some of its customers to exchange their annuity for a one-off taxable lump sum in 2017.