RCS - Rothesay Life PLC - Rothesay Full-Year Trading Update

Pernod Ricard SAAnnouncement

17/03/2022 09:15

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RNS Number : 0577F  Rothesay Life PLC  17 March 2022

 

17 March 2022

Full-Year Trading Update

Substantial capital and robust performance position us well for significant
growth opportunities

 

Rothesay, the UK's largest pensions insurance specialist, today provides an
update on its trading and financial performance for 2021.

 

·   New business: Rothesay wrote £3.0bn of new pension bulk annuity
business during 2021 (2020: £7.0bn), assisting ten schemes to de-risk their
pension liabilities. New business included buy-in transactions with Dow
Services UK Pension Plan, Outokumpu Stainless, Reach, Signet Group and William
Hill. Rothesay now secures the pensions of over 830,000 people. The Group's
disciplined approach to underwriting meant it was patient in the more subdued
market conditions experienced throughout the year, ensuring returns from new
business were appropriate. Significant opportunities are already being seen in
the market in the first quarter of 2022, with Rothesay currently exclusive on
over £1bn of new business.

 

·   Solvency: The Group's solvency remains very strong with a Solvency
Capital Requirement (SCR) coverage ratio of 226% (2020: 201%). During 2021,
Rothesay also successfully raised c.£740m of new capital through the issuance
of Restricted Tier 1 bonds. The Group's substantial surplus capital of £4.6bn
means that Rothesay is well positioned for significant future growth
opportunities.

 

·   Financial performance: The robust performance of the Group has led to
pre-tax IFRS profits of £913m (2020: £1,469m), the second highest profits
recorded in Rothesay's history.

 

·  Assets under management: The Group's assets under management grew to
£62.5bn (2020: £62.0bn). The asset portfolio has an average credit rating of
'AA'.

 

·     Market consistent embedded value (MCEV): MCEV gains generated from
new business and other operating profits were significant enough to offset the
negative impact of the increase in the future corporation tax rate to 25%.
This resulted in small year-on-year MCEV growth to £7.1bn (2020: £7.0bn).

 

·  Credit Ratings: Rothesay's ratings have been reaffirmed by both Fitch
Ratings and Moody's Investors Service. Rothesay Life Plc is rated A+ (Strong)
for the Fitch Insurer Financial Strength Rating, and A3 for the Moody's
Insurance Financial Strength Rating. The rating outlook remains stable from
Fitch and has been upgraded from stable to positive by Moody's.

 

·   Net Zero by 2050: In its 'Pathway to Net Zero' plan, the Group
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
addition, Rothesay's own operations are now carbon neutral, a year ahead of
its 2023 target.

 

·   Excellence in customer service: Despite the challenges presented by
COVID-19 throughout the year, the Group continued to deliver industry-leading
customer service as recognised by the Pensions Administration Standards
Association (PASA), the independent body dedicated to improving standards in
UK pension administration. Rothesay was re-accredited with PASA's Gold
standard in January 2022.

 

·   Clarity for our sector: The Group welcomed the High Court of England
and Wales' decision to approve the transfer of a portfolio of annuities from
The Prudential Assurance Company Ltd to Rothesay. The Court's decision
provided important clarity for our whole sector and we were delighted to
welcome our new policyholders to Rothesay at the end of the year.

 

·    Innovation in the market: The Group partnered with Kensington
Mortgages to launch a number of new long-term, fixed rate mortgages with terms
of up to 40 years, providing the certainty and long-term security that many
borrowers are looking for.

 

·     The Ukraine crisis: The conflict and distressing events in Ukraine
are deeply concerning for us all.

•      To support its vital Ukrainian relief work, the Group has made a
donation of £500,000 to the International Committee of the Red Cross. It has
also increased its match giving and charity day allowance for all employees.

•      The Group has no direct exposure to the region. It continues to
carry out regular stress testing and live monitoring of its financial and
solvency position to allow it to respond dynamically as wider market
conditions change.

 

 

Addy Loudiadis, Chief Executive Officer of Rothesay, said: "Rothesay's
substantial capital and robust performance over the course of 2021 means we
are very well positioned for the significant growth opportunities ahead, which
we are already encouraged to see materialising. We continue to be disciplined
in our approach to underwriting, preferring to be patient even in a relatively
subdued market to ensure returns from new business are appropriate.

 

Rothesay's industry-leading risk management systems and innovative mindset
enabled us to negotiate market conditions well, particularly rising long-term
interest rates, and also create new ways to invest cautiously, such as with
our launch of long-term, fixed rate mortgage products. We are strongly placed
to benefit from the significant new business opportunities we are now seeing
and look forward to continuing to innovate in the year ahead, while remaining
relentlessly focused on policyholder security and excellence in customer
service."

 

The Group's solvency metrics as at 31 December 2021 are summarised in the
table below:

 

                                  Group  Rothesay Life Plc

                                  £m     £m
 Own funds available to meet SCR  8,269  8,361
 SCR                              3,657  3,657
 Surplus above SCR                4,612  4,704
 SCR coverage                     226%   229%

 

 

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, Will Barker +44
(0)7827 960151 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 830,000 people
and pay out, on average, approximately £240 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 some of the UK's best known companies to
provide pension solutions, including the schemes of Allied Domecq, Asda,
British Airways, Cadbury's, the Civil Aviation Authority, National Grid, the
Post Office, Prudential 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. In September
2020, our shareholders increased their investment in Rothesay through a
transaction which valued the business at £5.75bn.

 

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)

 

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