Legal & General uses Ireland as springboard
The deal will cover annuities purchased by both individual customers and those purchased, in bulk, by Irish-based pension schemes and will take in New Ireland’s existing annuity business and “a proportion of its future business”.
The transaction also marks L&G’s first annuity reinsurance deal outside of its core market of Britain. The company — which already has a small market share of the wider Irish financial services market, via its range of investment management services and general savings products — is a market leader in annuity reinsurance in Britain and is looking to expand this part of its business internationally, viewing Ireland as a strategic market in which to begin.
Kerrigan Procter — the head of Legal & General’s annuity division — said the company expects the interest in insurance-based de-risking solutions to continue to be strong, “with the potential for further international growth” existing.
“The Irish annuity market — for both bulk and individual annuities — looks set to expand over the next few years and this arrangement will enable Legal & General to actively participate in this exciting market,” he added.
New Ireland has around 25% of the country’s annuities market.
“The Irish annuity market is seeing strong demand — both from individuals retiring and from pension schemes and their corporate sponsors, who are seeking to de-risk. Our partnership with Legal & General will allow us to grow our market share while managing the risks in our business appropriately,” added Elaine Spillane, head of group risk and annuities at New Ireland Assurance.
L&G has identified retirement solutions — both in Britain and abroad — as one of its five areas of growth; adding the New Ireland deal shows its ability to expand “into attractive markets”.
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