Rothesay Life Signs $2.5 Billion Deal With U.K. Civil Aviation

Rothesay Life Ltd. agreed to insure 1.6 billion pounds ($2.5 billion) of bulk annuities for the U.K. Civil Aviation Authority pension fund.

Rothesay, founded by former Goldman Sach Group Inc. banker Addy Loudiadis, is insuring part of the 7.25 billion-pound pension fund, the London-based company said Wednesday. The transaction, known as a “buy in,” takes Rothesay’s new business written this year to 3.4 billion pounds.

“The deal is further evidence of the increasing maturity of the bulk annuity market,” said Rothesay Managing Director Tom Pearce. “Our strong capital position and cautious approach to risk management leaves us well positioned to take advantage of growth opportunities.”

Insurers, including Legal & General Group Plc and Aviva Plc, are looking to increase their corporate annuity businesses to offset a slump in individual annuity products after government pension changes in 2014. L&G wrote the largest U.K. transaction in 2014, insuring 3 billion pounds of liabilities for the ICI Pension Fund, which provides benefits for former employees of Imperial Chemical Industries Plc.

Growth of the bulk annuity market may encourage privately owned firms including Rothesay and London-based Pension Insurance Corp., or PIC, to seek initial public offerings, Bloomberg Intelligence analyst Charles Graham wrote in June.

Goldman Sachs owns 36 percent of Rothesay after Blackstone Group LP and GIC Pte, Singapore’s sovereign wealth fund, each bought 28.5 percent stakes. Massachusetts Mutual Life Insurance Co. owns 7 percent.

PIC is backed by a group of firms including JC Flowers & Co., Swiss Re AG and Lloyds Banking Group Plc.