Scottish Widows insures 400 million pounds of Wiggins Teape pension
LONDON – Scottish Widows, the insurance arm of Lloyds Bank LLOY.L, has insured 400 million pounds of former UK paper manufacturer Wiggins Teape’s pension scheme, the insurer said on Tuesday.
The deal, in which Scottish Widows takes on the risk of two-thirds of Wiggins Teape’s defined benefit, or final salary, pension scheme, is the insurer’s first external transaction in the so-called “bulk annuity” market, it said in a statement.
Insurers such as Prudential PRU.L, Legal & General LGEN.L and smaller specialist insurers have been focusing on the bulk annuity market after British pensions reforms have dented the sales of individual annuities, which give retirees a fixed income for life.
Bulk annuity deals totalled a record 13 billion pounds in 2014. Scottish Widows competed against six other insurers for the Wiggins Teape deal, Tom Seecharan, director at adviser KPMG, said in the statement. -Reuters