May 23, 2016 / 7:06 AM / in 2 years

Legal & General buys 3 billion pound UK annuity portfolio from Aegon

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.

The logo of Legal & General insurance company is seen at their office in central London March 17, 2008. REUTERS/Alessia Pierdomenico

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

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