Tom Pearce: An exciting pipeline of potential new business opportunities
Rothesay has published its full-year trading update for 2024 – revealing a 24% increase in new business premiums during the year.
The specialist pension insurer said it generated new business premiums of £15.7bn in 2024, up from £12.7bn in 2023. It said transactions during the year included insuring £9.6bn of liabilities with NatWest Group Pension Fund, the acquisition of Scottish Widows' bulk annuity portfolio from Lloyds Banking Group and pension risk transfer (PRT) deals with four other pension schemes including a deal with the Avimo Pension Scheme and the Medical Protection Society.
Rothesay said a "buoyant but competitive" bulk annuity market driven by an ongoing desire from pension scheme trustees and corporate sponsors to transfer their risk continued to create "considerable new business opportunities".
The insurer said it had priced its largest ever number of individual PRT transactions in 2024 and expected a similar level of activity over 2025.
Rothesay said its assets under management had increased during the year from £61.0bn to £70.7bn – adding it now secured the pensions of over one million people and made annual payments of some £3.8bn to its policyholders.
It said its solvency position continued to be strong, with a solvency capital requirement coverage ratio of 261% at 31 December 2024, down slightly from 273% at the end of 2023.
The firm said it generated adjusted operating profits of £1.8bn, up from £1.3bn in 2023 and pre-tax IFRS profits of £113m, down from £906m in 2023.
It said its market consistent embedded value stood at £7.7bn at the end of 2024, up from £7.5bn the previous year – noting that substantial gains driven from new business and investment performance were partially offset by the impact of interest rates.
The firm said it paid an interim dividend of £361m in October 2024.
Rothesay chief executive Tom Pearce said: "Rothesay achieved another strong year of growth, delivering significant volumes of new business. This positive momentum is testament to our proven execution capabilities, substantial capital resources and the support from our two long-term shareholders.
"As we head into 2025, a busy and competitive pension risk transfer market is already generating an exciting pipeline of potential new business opportunities. We continue to innovate and invest across our business to enable us to complete the largest and most sophisticated transactions in our market while maintaining pricing discipline and our cautious approach to risk management. Rothesay is purpose-built to protect pensions and we are proud to secure the future for over one million policyholders and deliver on our commitment to provide the highest levels of customer service."
Rothesay noted its two shareholders – GIC and MassMutual – continued to provide the group with "exceptional long-term support". It said that, during the year GIC decided to reinvest the interim dividend paid by Rothesay in 2023 into the business. Following this reinvestment, it said GIC is now a 50.2% shareholder in Rothesay and MassMutual is a 47.6% shareholder. It said GIC and MassMutual retain equal governance rights, including an equal number of board director positions.
