Life and pensions group Aegon is selling the majority of its UK annuity portfolio to specialist insurer Rothesay Life.
Under the terms of the deal, which covers two-thirds of the portfolio, Aegon will reinsure £6 billion of liabilities to Rothesay.
The transfer process is set to take place over the next two years and Aegon will continue to make annuity payments to customers on behalf of Rothesay during this period.
Addy Loudiadis, chief executive and founder of Rothesay Life, said: “As a specialist provider of annuities, I am delighted that Aegon has chosen Rothesay Life to secure its policyholders’ pensions over the long term.
“This transaction represents a significant step for Rothesay Life taking total assets under management to over £20bn and total lives insured to over 400,000.”
Edinburgh-based Aegon UK said it had not been an active player in the UK annuity market since 2010 and by selling the majority of its annuity portfolio it will be able to focus on its platform which enables workplace savers and consumers to build their savings across their working lives, then manage an income in retirement with the support of a financial adviser.
The firm said it was exploring options to divest the remainder of its UK annuity book.
Adrian Grace, Aegon UK chief executive, said: “Following a review of our annuity portfolio last year we are delighted to announce the sale of the majority of our annuity book.
“We’re committed to the UK see our future in offering advisers and employers with a platform that combines the best investment solutions, guarantees and service.
“The sale marks a huge milestone for Aegon and today’s deal gives us the impetus to continue growing our platform and protection business.”