The provider will reinsure £6bn of liabilities under the terms of the agreement and expects to move to cut its annual operational free cash flows by £35m, with an impact on 2016 underlying earnings before tax of £20m.
“The move will also reduce Aegon NV’s risk weighting under Solvency II.
According to a statement from the provider, the sale will mostly benefit its rapidly growing investment platform, along with the protection business.
Alex Wynaendts, chief executive of Aegon NV, said: “this will enable us to focus on our fast growing platform in the UK.
“We are confident this transaction is in the best interests of our annuity customers, as Rothesay Life is an established and respected provider”.
Aegon and Rothesay Life will put a migration plan in place in which the administration of the pension annuity portfolio will be executed by Aegon until the completion of the transfer.
Aegon added it was exploring options to also divest the remainder of its UK pension annuity portfolio.
(FTadviser, May, 2016)
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