RCS - Rothesay Life PLC - Full-Year Trading Update

International Consolidated Airlines SAAnnouncement

05/04/2024 08:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240405:nRSE4100Ja&default-theme=true

RNS Number : 4100J  Rothesay Life PLC  05 April 2024

 

5 April 2024

Full-Year Trading Update

Significant capital resources and execution capabilities deliver strong
performance in a record pension risk transfer market

 

Rothesay, the UK's largest pensions insurance specialist, today provides an
update on its trading and financial performance for 2023.

 

·     New business: Rothesay completed de-risking transactions with twelve
pension schemes during 2023, resulting in new business premiums of £12.7bn
(2022: £3.3bn), one of its strongest years of growth to date. Material
improvements in pension scheme funding levels continue to create very
significant new opportunities going forward with an unprecedented pension risk
transfer market pipeline.

 

·     Scottish Widows' annuity business acquisition: In March 2024,
Rothesay announced that it had agreed to acquire Scottish Widows' c. £6bn
bulk annuity portfolio from Lloyds Banking Group, its sixth acquisition of
in-force annuities. The transaction covers 42,000 underlying policyholders.

 

·     Assets & liabilities: Assets under management have increased
to £61.0bn (2022: £47.0bn) at 31st December 2023. Rothesay now secures the
pensions of over 934,000 people.

 

·     Solvency: The Group's solvency position continues to be very
strong, with a Solvency Capital Requirement (SCR) coverage ratio of 273% at
31st December 2023 (2022: 255%). Surplus capital of £5.4bn (2022: £4.9bn)
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 30th June
2023. Rothesay also successfully issued a new £500m Tier 2 bond in May to
further strengthen the Group's capital position in preparation for the
execution of its significant new business pipeline.

 

·      Focus on full scheme de-risking: A direct impact of the rapid
improvement in scheme funding levels is the increased number and size of
schemes seeking full scheme de-risking solutions. Rothesay has continued to
expand its capabilities in response to changes in the market and has grown its
team to address these needs. For example, the Group has established an
Illiquid Asset Transition team, working out of London and New York, to
simplify the transition of schemes' illiquid asset holdings by providing full
underwriting and risk management solutions.

 

·      Financial performance: The Group generated adjusted operating
profits of £1,358m (restated 2022: £579m) and pre-tax IFRS profits of £906m
(restated 2022: loss of £1,054m).

 

·      Dividend: Rothesay declared an interim dividend of £351m which
was paid in October 2023.

 

·      Market consistent embedded value (MCEV): Substantial MCEV gains of
£1.4bn were generated from new business and other operating profits.
Rothesay's MCEV at 31st December 2023 was £7.5bn (2022: £6.4bn) following
payment of the interim dividend.

 

·      Risk management: Rothesay's long-term investment in
market-leading risk management systems, combined with its comprehensive
liquidity risk management framework, meant that the Group's solvency and
liquidity position remained very strong despite the significant turbulence in
the financial markets in 2023. Rothesay saw its industry-leading approach to
risk management recognised in the European Pensions Awards 2023, where the
Group was named Risk Management Firm of the Year.

 

·      Credit ratings: Rothesay Life Plc is rated A+ (Strong) for the
Fitch Insurer Financial Strength Rating, and A2 for the Moody's Insurance
Financial Strength Rating. The rating outlook is stable from both.

 

·      Board appointments: The Group was pleased to appoint Graham
Butcher as its Chief Financial Officer. The Group was also pleased to appoint
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.

 

·      Customer service excellence & industry recognition: Rothesay
successfully implemented the Financial Conduct Authority's Consumer Duty
regulation, which sets new standards of consumer protection across financial
services. The Group maintained high customer service standards during the
year, with over 94% (2022: 95%) of customers rating the quality of service
received as good or excellent. We were proud to win the Impact on Customer
Experience Award from the Pensions Management Institute and Insurance Company
of the Year at the Insurance Asset Management Awards.

 

·      Investing in our people: The Group recruited new talent
throughout the year, with employee numbers increasing to 460 (2022: 396). It
continues to have market-leading levels of employee engagement, with our
employee survey showing a further increase in the employee engagement score to
78% (2022: 72%) with an outstanding survey response rate of 94% (2022: 94%).

 

·      Net-zero by 2050: Rothesay is committed to transitioning its
investment portfolio to net-zero greenhouse gas emissions by 2050 and to a 20%
reduction in Carbon Intensity by 2025. In 2023, Rothesay made a further
commitment to reduce the Carbon Intensity of its corporate bond sub-portfolio
by 50% by 2030. The Group's own operations continue to be CarbonNeutral®. It
is also a signatory to the Financial Reporting Council's UK Stewardship Code
and has an MSCI ESG rating of AA.

 

·      LTA partnership: Rothesay is the exclusive pensions partner to
the LTA, the national governing body of tennis for Great Britain, supporting
the future of British tennis and helping to open up tennis to more people of
any age, ability and background. Rothesay is the title sponsor of the Rothesay
Summer Series: the Rothesay Open Nottingham, Rothesay Classic Birmingham and
Rothesay International Eastbourne.

 

·      The Rothesay Foundation: As part of its commitment to helping
older people in need, in 2023 the Rothesay Foundation funded a free and
confidential benefits check service for Summer Cheer participants, provided by
our charity partner Age UK. Since inception, almost 2,400 benefit checks have
been delivered with £12m of annual benefits identified.

 

Tom Pearce, Chief Executive Officer of Rothesay, said: "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."

 

The Group's solvency metrics as at 31(st) December 2023 are summarised in the
table below:

 

                                 Group  Rothesay Life Plc

                                 £m     £m
 Own funds eligible to meet SCR  8,466  8,558
 SCR                             3,101  3,101
 Surplus above SCR               5,365  5,457
 SCR coverage                    273%   276%

 

ENDS

 

Media Contacts

Rothesay: Anthony Marlowe, Head of Communications & Public Affairs

+44 (0)7912 550184 or anthony.marlowe@rothesay.com
(mailto:anthony.marlowe@rothesay.com)

Temple Bar Advisory: Alex Child-Villiers +44 (0)7795 425580 or Sam Livingstone
+44(0) 7769 655437 or rothesay@templebaradvisory.com
(mailto:rothesay@templebaradvisory.com)

 

 

 

Notes to Editors

About Rothesay

Rothesay is the UK's largest pensions insurance specialist, purpose-built to
protect pension schemes and their members' pensions. With over £60 billion of
assets under management, we secure the pensions of more than 934,000 people
and pay out, on average, approximately £200 million in pension payments each
month.

 

Rothesay is dedicated to providing excellence in customer service alongside
prudent underwriting, a conservative investment strategy and the careful
management of risk. We are trusted by the pension schemes of some of the UK's
best known companies to provide pension solutions, including British Airways,
Cadbury's, the Civil Aviation Authority, the Co-operative Group, National
Grid, Morrisons and telent.

 

Rothesay has two substantial institutional shareholders, GIC and Massachusetts
Mutual Life Insurance Company ("MassMutual"), who provide the company with
long-term support for its growth and development.

 

Rothesay refers to Rothesay Limited and its subsidiaries and is the trading
name for Rothesay Life Plc, an insurance company authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority. Firm Reference Number: 466067. Rothesay Life
Plc is registered in England and Wales with company registration number:
06127279 and registered address: Rothesay Life Plc, The Post Building, 100
Museum Street, London WC1A 1PB. Further information is available at
www.rothesay.com (http://www.rothesay.com)

 

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NRAUSOWRSAUSRAR