13 Sep 2018
Legal & General completes £4.4 billion bulk annuity buy-in with British Airways
Legal & General Group Plc (“Legal & General”) today announces that it has completed a £4.4 billion buy-in for British Airways PLC’s 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.
Laura Mason, CEO Legal & General Retirement Institutional
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.
Nigel Wilson, Chief Executive, Legal & General Group