Legal & General announces partnership with New Ireland Assurance to reinsure their annuity business
Legal & General has entered into an exclusive partnership arrangement with New Ireland Assurance ("New Ireland") to reinsure €136 million of New Ireland's existing annuity business, as well as a proportion of its future business.
Legal & General has identified retirement solutions both in the UK and abroad as one of its five drivers of growth. The completion of a first annuity transaction outside of the UK demonstrates Legal & General's ability to expand into attractive markets.
The reinsurance arrangement covers annuities purchased by individual customers and bulk annuities purchased by Irish pension schemes. The combination of New Ireland's prominence and expertise in the Irish annuity market and Legal & General's experience from the UK annuity market, will provide a compelling proposition for both annuitants and pension schemes.
Elaine Spillane, Head of Group Risk and Annuities at New Ireland Assurance said: "The Irish annuity market is seeing strong demand both from individuals retiring and from pension schemes and their corporate sponsors who are seeking to de-risk. Our partnership with Legal & General will allow us to grow our market share while managing the risks in our business appropriately."
Kerrigan Procter, Managing Director of Legal & General's Annuity business said:
"Legal & General is actively pursuing opportunities to leverage its expertise in non-UK markets, such as North America and Europe. The Irish annuity market for both bulk and individual annuities looks set to expand over the next few years and this arrangement will enable Legal & General to actively participate in this exciting market.
2012 proved to be a very strong year for the annuity market and for Legal & General, with strong premium volume despite the persistence of low yields. It also heralded two multi-billion dollar buyouts in the United States, a sign that pension scheme de-risking is seen globally as a risk worth actively managing. We expect the interest in insurance based de-risking solutions to continue to be strong, with potential for further international growth."
Legal & General delivered record individual annuities for 2012 up 26% on 2011 to £132m. Legal & General's annuity business manages assets of £32bn and our capability in meeting demand from pension trustees delivered Bulk Annuity sales of £102m (2011: £146m) which included the sizeable £35m APE Tate & Lyle buy-in deal. Since the year end we have completed a longevity insurance deal with the BAE Systems 2000 Pension Plan covering £3.2bn of associated liabilities.
Notes:
· In exchange for the premium of EUR 136 million, Legal & General will make monthly payments to New Ireland covering a specified proportion of the pension payments that New Ireland is obligated to pay to annuitants. In this way, both investment and longevity risk pass to Legal & General. The funds are expected to be received by Legal & General from New Ireland before the end of April 2013.
· Legal & General is one of the UK's leading financial services companies and one of the UK's top 50 companies in the FTSE 100 Index. Over 5.75 million people rely on us for life assurance, pensions, investments and general insurance plans.
· Legal & General has been an active participant in the bulk annuity market for over 25 years and won buyout firm of the year at the 2012 European Pensions Awards. Legal & General provides annuities to over 700,000 current pensioners and over 150,000 deferred pensioners.
· Legal & General has expertise in investment management, all aspects of defined benefit provision as well as an in-depth understanding of mortality trends and longevity risk.
· New Ireland Assurance is one of Ireland's leading assurers and provides a range of innovative pension, investment and protection products. New Ireland Assurance has approximately €800m of annuity reserves, with new annuity business of around €150m per year. New Ireland Assurance Company plc is regulated by the Central Bank of Ireland and is a member of the Bank of Ireland Group.
Notes:
Kate Vennell |
Head of investor Relations |
020 3124 2150 |
Ian baker |
Investor relations manager |
020 3124 2047 |
john godfrey |
group communications manager |
020 3124 2090 |
richard king |
head of media relations |
020 3124 2095 |
Financial Calendar 2013 |
Date |
Annual general meeting |
22 May 2013 |
Savings Investor Day |
23 May 2013 |
Payment date of 2013 final dividend |
29 May 2013 |
Half-year Results 2013 |
6 August 2013 |
Q3 Interim Management Statement 2013 |
5 November 2013 |
Forward looking statements
This document may contain certain forward-looking statements relating to Legal & General Group, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General Group's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this document or any other forward-looking statement it may make.
