Hogan Lovells has advised the Phoenix Group on the sale of annuity business with liabilities of approximately £5 billion to Guardian Assurance Limited. The transaction was announced on Wednesday 27 June.
The transaction is one of the largest sales of annuity business ever in the UK and has been structured as an initial reinsurance, which will be followed by a transfer of the annuity policies under Part VII of the Financial Services and Markets Act 2000.
The reinsurance accelerates the release of capital and increases cash generation by approximately £200 million in 2012, significantly de-risking the balance sheets of Phoenix Group companies through the transfer of longevity and investment risk, and increasing its financial flexibility.
The team advising Phoenix Group was led by London corporate insurance partner-elect Steven McEwan, corporate insurance partner Charles Rix and tax partner Kevin Ashman.
Commenting on the transaction Steven McEwan said:
“We are pleased to have advised Phoenix Group on one of the largest sales of annuity business ever in the UK, highlighting our strength and presence in the life insurance sector.”
