Scottish Widows Enters De-Risking Market

The Lloyds Bank subsidiary makes its bulk annuity debut with a £400 million buy-in.

The UK has today welcomed the latest entrant to the de-risking market: Scottish Widows.

The company, which is part of Lloyds Bank, sealed a £400 million ($604 million) buy-in with the Wiggins Teape Pension Scheme, insuring retired former employees of paper manufacturer Arjowiggins.

The transaction covers roughly two-thirds of the pension’s liabilities, Scottish Widows said. It made use of an “innovative premium payment process,” which allowed the pension to secure a price and pay it over “an extended execution period”.

Emma Watkins, director of bulk annuities at Scottish Widows, said the company had “worked closely with the trustees and their advisers to tailor the arrangement to meet the scheme’s needs”.

Watkins joined Scottish Widows in June from consultant LCP to build the bulk annuity team. She told CIO in April that the company’s high-profile brand, as well as that of its parent company, would help with attracting clients.

“The relationship with Lloyds is clearly key,” she added. “With buy-ins and buyouts, trustees want to work with someone they and the corporate sponsor can be comfortable with.”

Related: UK Pension Insures £5B in ‘Umbrella’ De-Risking Deal; NISA: Partial Buyouts Are ‘Expensive, Underwhelming’; Philips Seals UK’s Biggest-Ever Full Buyout