LONDON (Reuters) - Legal & General Group said on Monday it has bought a 3 billion pound ($4.35 billion) UK annuity portfolio from Dutch insurer Aegon NV.
It said the transaction has been structured initially as a reinsurance contract and covers approximately 27,000 in-payment policyholders.
L&G said the immediate impact of the transaction would decrease its capital surplus under Europe’s Solvency II rules by 50 million pounds, with its Solvency II Coverage Ratio dropping 3 percent. Aegon said in a separate statement that the deal would boost its Solvency II ratio by up to 20 percent.
L&G said its retirement unit has written approximately 550 million pounds of total annuities so far this year, in addition to this Aegon transaction.
In 2015 Legal & General Retirement said it completed 2.4 billion pounds of bulk annuity deals.
($1 = 0.6894 pounds)
Reporting by Maiya Keidan; Editing by Rachel Armstrong