L&G expects £7bn of de-risking deals in H2 2018

Written by Theo Andrew
09/08/18

Legal & General (L&G) has completed £735m of pension risk transfer deals in the first half of 2018 and expects to close on a further £7bn of transactions in H2 2018.

According to its half-year results, L&G completed £735m of buy-in and buyout transactions across 14 transactions, despite being significantly off the £1.62bn it completed over the same period last year.

The group said that it expects £20bn of pension risk transfers to complete in 2018, with most of the deals being written in the second half of the year.

Currently, L&G said it quoting on £20bn of pension risk transfer deals.

In June, L&G completed a £325m buy-in with Heathrow on its BAA Pension Scheme.

L&G group chief executive, Nigel Wilson, said: "We expect to have an exceptionally busy H2.
We are currently actively quoting on over £20bn of UK pension risk transfer deals, including over £7bn of transactions in exclusive negotiations expected to close in H2.

“We are reviewing our long-term mortality assumptions and expect to make a full year release in H2 which will be larger than the £332m released for the full year 2017.”

The group also said that it is extending its global footprint in the US and Asia, while its “Changing Britain” programme, which reflects regional devolution, means it is “strongly positioned for growth in H2 and beyond”.

According to the firm, the UK defined benefit currently has £2.3trn of liabilities, of which only 7 per cent has been transacted upon to date.

Yesterday, Prudential and Aviva Life agreed on a £1bn longevity reinsurance deal as the market gains momentum in the second half of the year.

Elsewhere, L&G’s defined contribution business totalled £3.5bn in H1 18, up from the £1.7bn recorded over the same period last year, while its DC assets under management jumped 15 per cent to £72.3bn.

The increase was down to a 21 per cent growth in customers to its pensions platform.

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