Rothesay has acquired the £6bn Scottish Widows’ in-force bulk annuity portfolio from Lloyds banking group, which covers the benefits of 42,000 people.

The acquisition of Scottish Widows’ portfolio represents Rothesay’s sixth transaction of in-force annuities, which is initially structured as a reinsurance agreement, with a Part VII transfer – a court-approved process for moving a business from one entity to another – to follow next year. This is subject to regulatory and legal approval.

Rothesay said that policies will continue to be serviced by Scottish Widows until the effective date of the Part VII transfer, at which point they will begin to receive benefits in the normal way from Rothesay.

Chira Barua, chief executive officer of Scottish Widows and CEO of insurance, pensions and investments at Lloyds Banking Group, said: “We’re on a mission to help people in the UK build financially secure futures, supporting the group’s strategy of building a customer-focused digital leader and integrated financial services provider.”

Barua said the sale will enable Lloyds Banking group to focus and invest in the insurance, pensions, investments, retirement and protection markets where it wants to grow, while ensuring positive outcomes for its bulk annuities customers.

Fenchurch Advisory Partners advised Lloyds and Scottish Widows on the deal. 

Tom Pearce, CEO at Rothesay, said: “I am delighted that Lloyds Banking Group has chosen Rothesay as the long-term home for its bulk annuity business and look forward to welcoming our new policyholders from Scottish Widows.”

He added that through its capital resources and “proven strength” of its execution capabilities, it is able to deliver solutions for its clients across all areas of the pension de-risking market.

He said: “We are proud to provide award-winning levels of customer service for our policyholders along with long-term security for their retirement.”

Read the digital edition of IPE’s latest magazine