L&G Completes Largest Ever UK Bulk Annuity Deal

Legal & General has announced it has completed a £4.4 billion buy-in for British Airways’ pension scheme, Airways Pension Scheme (“APS”), covering nearly 22,000 pensioners. This is the largest ever bulk annuity policy arranged with a UK pension scheme and also included the conversion of existing longevity insurance into a bulk annuity.

As announced at the half year results, the UK pension risk transfer (“PRT”) market continues to demonstrate a high level of activity with Legal & General actively quoting on more than £20 billion, of which more than £7 billion were in exclusive negotiations at the time. Since then, Legal & General has completed £4.8 billion of UK PRT transactions, including the APS buy-in, and is now actively quoting on £27 billion of UK PRT deals. Additionally Legal & General has continued to show strong momentum in International PRT, completing £191 million of transactions since the end of June.

In aggregate, Legal & General has completed £6.0 billion of global pension de-risking transactions year to date (UK PRT: £5.3 billion, International PRT: £0.4 billion, Longevity Insurance: £0.3 billion). The financial metrics and Solvency II capital strain of these transactions are in line with previous levels reported by Legal & General.

“This transaction also included the conversion of existing longevity insurance to a bulk annuity, demonstrating Legal & General’s ability to deal with a complex situation and offer innovative solutions drawing on the broad experience and capabilities of the wider Legal & General Group.” – CEO Legal & General Retirement Institutional, Laura Mason.

“As we indicated at the half year results, the second half of 2018 is likely to be a record six months for our PRT business and we expect to announce further transactions in the next few months.” –  Chief Executive, Legal & General Group, Nigel Wilson.