Rothesay Life has recorded £1.9bn worth of new business in its half year results following deals with Zurich and the Lehman Brothers Pension Scheme.

The results, published today, show the company achieved an IFRS profit before tax of £176m, which it said was driven by a combination of high quality new business, cautious investment management and profits from the existing portfolio.

In addition, assets under management increased by 10 per cent, from £12.8bn at 31 December 2014 to £14.1bn.

In the first half of the year the group underwrote two large transactions totalling £1.7bn of new premiums.

The Lehman Brothers Pension Scheme secured a £644m bulk annuity deal with Rothesay Life in May this year, putting an end to the ‘assessment period’ the scheme was under for six years following its insolvency in 2008.

Furthermore, the £1.1bn deal with Zurich Assurance Limited was Rothesay Life's first reinsurance transaction of a block of in-force annuity policies by the group from another life insurer.

The group’s management team believe that such transactions will become more prevalent over the next few years as other insurance companies and groups look to release encumbered capital from legacy, non-core business units.

In addition, the group said it continues to “invest cautiously” including making loans secured on large low-risk collateral portfolios such as UK residential ground rents and was the sole investor in the first Consumer Price Index linked bond issued in the UK for the Greater London Authority.

Rothesay Life chief executive officer Addy Loudiadis said by “selectively pursuing new business across the opportunity set and investing carefully” the business has demonstrated the “robustness of the group’s business model”.

The company expects the second half of 2015 to provide additional opportunities to source new business. It said as the European macroeconomic environment appears to be stabilising and interest rates expected to rise over the near to medium-term, increases to real yields will be positive for the group’s business.

It said most pension schemes are not fully interest rate hedged so will benefit from increased levels of funding which would in turn increase their demand for de-risking transactions from insurers such as Rothesay Life.

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