Rothesay secures £12.7bn in new business premiums in 2023

In their latest trading update, Rothesay, a prominent UK pensions insurance specialist, completed de-risking transactions with twelve pension schemes during 2023, resulting in new business premiums of £12.7 billion, a substantial increase from £3.3 billion in 2022, ultimately making 2023 one of the firm’s “strongest years of growth to date.”

The firm also generated adjusted operating profits of £1.358 million, (restated 2022: £579 million) and pre-tax IFRS profits of £906 million (restated 2022: loss of £1.054 million).

Assets under management have also seen a robust increase, coming in at £61.0 billion for 2023, compared to £47.0 billion from 2022. Rothesay now secures the pensions of over 934,000 people.

Moreover, the company’s solvency position continues to be very strong, with a Solvency Capital Requirement (SCR) coverage ratio of 273% at 31st December 2023 (2022: 255%).

With a surplus capital of £5.4 billion, (2022: £4.9 billion) this means that Rothesay is well-placed to capitalise on the “significant future growth opportunities” resulting from the buoyancy in the bulk annuity and pension risk transfer market.

Following regulatory approval, Rothesay implemented its Full Internal Model (FIM) in relation to its SCR on June 30, 2023.

Also, back in May, the company successfully issued a new £500 million Tier 2 bond, in order to further strengthen
the firm’s capital position in preparation for the execution of its significant new business pipeline.

Throughout 2023, Rothesay continued to bolster it’s workforce, with employee numbers increasing to 460 (2022: 396).

The company also appointed Graham Butcher as its Chief Financial Officer. As well as this, the firm also appointed three new independent Non Executive Directors: Lisa Arnold, Sophie O’Connor (as Chair of the Audit Committee) and
Katherine Garner; replacing retiring Directors Stan Beckers, Bill Robertson and Charles Pickup.

2024 has already started out well for the company, as back in March, Rothesay agreed to acquire Scottish Widows’ c. £6 billion bulk annuity portfolio from Lloyds Banking Group, its sixth acquisition of in-force annuities.

From what we understand, the transaction covers 42,000 underlying policyholders.

And lastly, Rothesay has revealed that it is committed to transitioning its investment portfolio to netzero greenhouse gas emissions by 2050 and to a 20% reduction in Carbon Intensity by 2025.

In 2023, the company made a further commitment to reduce the Carbon Intensity of its corporate bond sub-portfolio by 50% by 2030.

Tom Pearce, Chief Executive Officer of Rothesay, commented: “Rothesay performed very well in 2023, with the business delivering excellent financial results and one of the strongest years of growth in its history. Our substantial capital resources combined with our proven execution capabilities, meant we were able to complete some of the largest and most complex transactions in the market while maintaining our careful approach to risk management and pricing discipline.

“I am delighted that we now secure the future for nearing a million UK pension policyholders, providing best-in-class and innovative solutions for our clients. Our long-standing approach of continuous investment across our business – from our purpose-built risk management systems to our culture of operational excellence – means we are very well-placed to continue to capitalise on the strong momentum in our market, protecting the future for our policyholders and delivering value for our two long-term shareholders.”

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