Rothesay profits up following record year for pension risk transfer market

Written by Michael Griffiths

08/04/2024

Rothesay Life generated adjusted operating profits of £1.4bn in 2023, the group has reported in its latest trading update.

The figure is up from £579m in 2022 as the insurance firm also recorded pre-tax IFRS profits of £906m last year, stating that its significant capital resources and execution capabilities helped it deliver a “strong performance” in a record pension risk transfer market in 2023.

Rothesay completed de-risking transactions with 12 pension schemes last year, resulting in new business premiums of £12.7bn – one of the group’s strongest years of growth to date. The group’s new business premiums had totalled £3.3bn in 2022.

The figures follow Rothesay’s announcement in March that it has agreed a deal to acquire Scottish Widows’ £6bn bulk annuity portfolio from Lloyds Banking Group.

Rothesay’s assets under management (AuM) have now increased to £61.0bn as of 31 December 2023 – up on £47.0bn at the end of 2022 – with the group now securing the pensions of over 934,000 people. The insurer’s solvency position also continues to be strong after it reported a solvency capital requirement coverage ratio of 273%.

“Our substantial capital resources combined with our proven execution capabilities, meant we were able to complete some of the largest and most complex transactions in the market while maintaining our careful approach to risk management and pricing discipline,” Rothesay CEO, Tom Pearce, said.

“Our long-standing approach of continuous investment across our business – from our purpose-built risk management systems to our culture of operational excellence – means we are very well-placed to continue to capitalise on the strong momentum in our market, protecting the future for our policyholders and delivering value for our two long-term shareholders.”

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