Rothesay profits surge amid pension demand

Wednesday 10th April 2024 07:01 EDT

Rothesay Life is celebrating a record year of growth, fueled by a surge in deals as companies look to transfer retirement risks to insurers.

The pensions specialist reported twelve successful transactions last year, resulting in a substantial increase in new business premiums from £3.3 billion in 2022 to £12.7 billion. Additionally, it hinted at forthcoming deals, citing ongoing enhancements in pension scheme funding levels and an unprecedented pipeline in the pension risk transfer market.

Since 2021, higher interest rates have bolstered the funding positions of numerous defined-benefit pension schemes. This improvement enables employers to transfer these longstanding pension risks to insurers, liberating themselves from unpredictable liabilities that stretch decades into the future.

Scheme trustees generally support these transactions because they shift pension promises to insurers with substantial capital reserves, rather than relying on the sponsoring company, thus providing greater security.

Last year, the Co-operative Group and Thales, the French defence company, were among the businesses that finalised deals to transfer their pension obligations to Rothesay.

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