Scottish Widows boosts sales after entering bulk annuity market
Scottish Widows' life and pension sales have risen by 10% since 2014 on the back of £2.8bn from its first two bulk annuity deals.
It comes as the insurer entered the bulk annuity market last year after seeing individual annuity sales fall following George Osborne's 2014 Budget announcement of the pension freedoms.
A £400m pensioner buy-in with the Wiggins Teape pension scheme in the fourth quarter of 2015 had contributed to Scottish Widows building on its first bulk annuity transaction with the £2.4bn Scottish Widows With-Profits fund earlier in the year. The Wiggins Teape deal was its first external bulk annuity and the insurer said it continues to see the market as attractive.
A team of longevity and bulk pricing experts has been built to support its new bulk annuity proposition.
The bulk annuity business was also a main driver in new business income which increased by £58m. However, this was offset by reduced individual annuity sales income which came into force after the pension freedoms in April 2015.
The insurance company's pensions and investment sales rose during 2015 from £8.6m on 31 December 2014 to £9.4m on 31 December 2015.
Corporate pensions funds under management had increased by £1.4bn to £28.4bn, as a further 1,600 employers and 30,000 employees became part of auto-enrolment.
Despite underlying profits increasing by 4% to £962m from £922m, underlying profits for the pensions and investments group fell during 2015 from £236m to £176m.
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