Insurance

We advise on a wide range of insurance M&A. Recent experience includes advising:

• Allianz on its agreement with Sanlam to combine their operations across Africa (excluding South Africa).
• Ageas on the sale of its UK commercial lines front book business to AXA Insurance.
• RSA on its £7.2 billion recommended cash offer made by a subsidiary of Intact Financial Corporation, acting in consortium with Tryg A/S.
• Aviva on the strategic divestment of a number of its businesses including the sale of Aviva Poland, Aviva France and Aviva Vietnam, a majority shareholding in Aviva Singapore, its shareholding in its Indonesian joint venture PT Astra Aviva Life and its stake in its Hong Kong joint venture, Blue.

• Marsh & McLennan on the £4.3 billion recommended cash acquisition of Jardine Lloyd Thompson.
• esure in connection with the approximately £1.2 billion takeover by Bain Capital.
• Standard Life Aberdeen on the sale of its capital-intensive insurance business to Phoenix for a total consideration of £3.2 billion.

Our experience in this area includes advising on collateralised reinsurance structures, transformer deals and alternative risk transfer, including the use of longevity swaps. Recent experience includes advising:

• Canada Life on multiple collateralised longevity swaps with UK and EU counterparties, including PIC, Aegon and NN.
• A major insurer on multiple reinsurance arrangements in respect of its bulk annuity liabilities.
• Zurich Insurance on the transfer of its pre-2007 UK legacy employers’ liability portfolio to Catalina by way of a reinsurance followed by an insurance business transfer.
• RSA on its disposal of £834 million of UK legacy liabilities to Enstar, which took the form of a Solvency II compliant collateralised reinsurance arrangement followed by a Part VII transfer.
• Delta Lloyd Levensverzekering on a transaction with Reinsurance Group of America to mitigate longevity risk related to its Dutch life insurance portfolio by way of a six year longevity swap.
• AEGON on its €12 billion longevity swap with Deutsche Bank.

Our pensions risk transfer work combines the expertise of our insurance, financing and pensions practices. We have advised pension schemes, insurers, reinsurers and other financial institutions in this area. Our recent experience includes advising:

• Tata Steel UK on the full buy-in of the British Steel Pension Scheme, achieved by phased buy-ins with Legal & General totalling £7.5 billion of liabilities – BSPS is the largest scheme in the UK to have secured full insurance.
• Intact Financial Corporation and RSA on the insurance of £6.5 billion of liabilities in total of RSA’s two main defined benefit pensions schemes with Pensions Insurance Corporation.
• Legal & General on the insurance of £4.8bn of liabilities of Boots Pension Scheme, the UK’s largest single buy-in transaction by premium size, and multiple other buy-in transactions including with Reuters Supplementary Pension Scheme, the Commonwealth Bank of Australia (UK) Staff Benefits scheme and the Pearson Pension Plan.
• De La Rue plc on a de-risking of the De La Rue Pension Scheme with Scottish Widows.
• Whitbread plc on a de-risking of the Whitbread Group Pension Fund with Standard Life, part of Phoenix Group.
• Aviva on the de-risking of the Aviva Staff Pension Scheme by way of a circa £5 billion longevity swap transaction involving insurance and reinsurance arrangements. The transaction has an innovative structure whereby an entity within the Aviva group acts as insurance intermediary by passing on the transfer of risk from the scheme to three reinsurers.

We have a very active practice advising on transactions in the Lloyd’s sector, focusing in particular on equity investment, acquisitions and disposals and reinsurance arrangements. We advised:

• MCI Holdco (UK) Limited on the launch of a new “syndicate-in-a-box”, Syndicate 1902.
• OMERS on the UK aspects of its acquisition of a 14% stake in BRIT from Fairfax Financial Holdings.
• RiverStone Management on its reinsurance-to-close transactions (“RITCs”) with ArgoGlobal and MS Amlin.
• White Mountains on its investment of fresh capital and acquisition of a majority interest in Ark Insurance Holdings, the ultimate parent company of Ark Syndicate Management. Ark manages the underwriting of syndicates 4020 and 3092 at Lloyd’s.
• RiverStone on its acquisition of the Neon Group (including Lloyd’s of London insurer, Neon) from American Financial Group and the associated disposal of Neon Sapphire to Spring Partners.
• Blackstone’s Tactical Opportunities business on its investment in Ki, the first fully digital and algorithmically-driven Lloyd’s syndicate.

Insurance business transfer schemes are a key technique for internal restructurings, demutualisations and risk transfers as well as on the sale of a business or a portfolio of business. We regularly advise on transfer schemes in all of these contexts. Our recent experience includes advising:

• Zurich Insurance plc on its proposed Brexit-related Part VII transfer of the majority of its existing UK branch business, representing over £2 billion of gross written premiums, to a newly-authorised UK branch of Zurich Insurance Company Limited.
• Legal & General on the successful transfer of its mature savings business to ReAssure.
• Canada Life on the transfer of insurance business from MGM Advantage Life Limited to Canada Life Limited.
• Ageas and RiverStone on the transfer of general insurance and reinsurance policies from Ageas to RiverStone.
• Zurich Insurance on the transfer of its pre-2007 UK legacy employers’ liability portfolio to Catalina.
• a number of UK insurers, including Prudential, Aviva and Standard Life, on transfers of business to non-UK entities as part of their Brexit structuring plans.

Recent work advising insurers on balance sheet optimisation includes advice on matching adjustment structures, the application of the prudent person principle, investment in the real estate sector and the financing of infrastructure projects. 

The majority of our work in this area is confidential but our disclosable work includes significant real estate investments and matching adjustment structuring for Legal & General.

We have a strong financing practice which involves many of the key players in the insurance sector on their debt capital markets programmes. Our recent work includes advising:

• Prudential on its issuance of $1 billion 2.95 per cent subordinated notes, intended to qualify as tier 2 capital under the Insurance (Group Capital) Rules of Hong Kong.
• Just Group on its issue of Tier 1 Contingent Convertible Notes, the first issuance of sustainability restricted tier 1 debt securities by a European insurer.
• Pension Insurance Corporation on its issuance of £450 million 7.375% Fixed Rate Reset Perpetual Restricted Tier 1 Contingent Convertible Notes.
• Prudential on its issuance of £300 million 3.875% Resettable Dated Tier 2 Notes due 20 July 2049.
• Direct Line on its issue of £350 million Fixed Rate Reset Perpetual Restricted Tier 1 Contingent Convertible Notes.
• RSA Insurance Group on its issue of Floating Rate Perpetual Restricted Tier 1 Contingent Convertible Notes - the first public Solvency II compliant Restricted Tier 1 issuance by a UK insurer.

As a market leader in the field of equity capital markets, we are ideally placed to help our insurance sector clients on a range of capital issuances. Our recent experience includes advising:

• Prudential on its equity raise of up to five per cent of its issued share capital on the Hong Kong Stock Exchange, through a concurrent public offer in Hong Kong and an international placing to institutional investors.
• esure and Gocompare.com Group plc on the demerger of Gocompare.com and listing on the main market of the London Stock Exchange.
• China Re on the US$2 billion (approx.) global offering and the listing on the Main Board of the Hong Kong Stock Exchange of its H shares, one of the largest IPOs in Hong Kong in 2015.
• Standard Life on its return of around £1.75 billion to shareholders by way of a B/C share scheme.
• Brit on its initial public offering of its ordinary shares.
• RSA on its fully underwritten rights issue to raise approximately £773 million.
• esure on its initial public offering of its ordinary shares.
• Direct Line on its initial public offering and separation from RBS Group.

We advise on a range of different distribution arrangements in the insurance sector.  Our recent work includes advising:

• Standard Life Aberdeen (now abrdn) on the simplification and extension of its strategic partnership with Phoenix Group, including an extension of the strategic asset management partnership and the acquisition by Phoenix Group of the Standard Life brand.

• FWD on its agreement with TMB Bank Public Company Limited to sell its bancassurance contract to Prudential for a consideration of THB20 billion.

• Prudential in connection with the entry into of an exclusive bancassurance partnership over a 20-year term between Prudential Vietnam Assurance Private Limited and Southeast Asia Commercial Joint Stock Bank.
• FWD Group on a bancassurance arrangement with Siam Commercial Bank (SCB) for the distribution of FWD’s life insurance products to SCB’s customers in Thailand.
• a leading personal lines carrier on the review of over one hundred of its TOBAs and other distribution agreements and related arrangements.

Sector enquiries have become increasingly common in recent years. Our competition, regulatory and insurance sector specialists are able to provide expert advice to clients on UK and European competition enquiries and PRA and FCA investigations. Our work in this area includes advising:

• a number of insurers in connection with potential business interruption claims arising as a result of the COVID-19 pandemic, including advice in connection with the land-mark financial markets test case brought by the FCA on behalf of thousands of business interruption insurance policyholders.
• an insurance client on the implication of the FCA’s proposed past business review and redress programme in respect of its thematic review of the sale of enhanced annuities.
• esure in relation to the OFT call for evidence on the UK private motor insurance sector.
• the ABI and a number of client insurers on the potential impact of the ECJ’s ruling in the Test Achats case.
• a major broking client in relation to the European Commission competition sector inquiry into business insurance.
• a major broking client on an investigation by the European Commission into the response of the aviation industry following 9/11.

We have an unparalleled track record of advising on major insurance company demutualisations. We also have experience of advising on smaller transactions utilising demutualisations and on the restructuring of life funds. Our experience includes advising:

• Prudential on the demerger of Jackson Financial Inc. and its subsidiaries, which include Jackson National Life, the US life insurance business.
• Prudential on the demerger of its UK and Europe business (M&G Prudential) from Prudential plc, resulting in two separately-listed companies.
• each of the Department of Health and Social Care and the Welsh Government on (i) the creation of State-backed indemnity schemes covering future medical negligence liabilities incurred by NHS general practitioners in England and Wales; and (ii) commercial discussions with the three principal UK medical defence organisations and preparing transaction documentation for the assumption from them of existing liabilities.
• a number of insurance groups on Brexit-related restructuring plans.
• on the demutualisation and flotations of Standard Life, Old Mutual, Norwich Union, Colonial Mutual and Irish Life.

An important part of our practice is the knowledge and experience that practitioners within our insurance group have of the statutory and regulatory environment in which our clients operate. A number of our practitioners have spent time on secondment to regulatory and governmental bodies. We advise our clients on the full range of regulatory issues including:

• the implications of Brexit and associated restructuring plans.
• Solvency II including UK implementation and PRA guidance.
• other existing and forthcoming European legislation.
• group capital requirements.
• management of with-profits funds.
• the classification of insurance and reinsurance.

We advised abrdn (formerly Standard Life Aberdeen) in relation to the simplification and extension of its strategic partnership with the Phoenix Group. This follows on from our earlier work advising Standard Life Aberdeen on the sale of its capital-intensive insurance business to Phoenix.  The new arrangements include:

• the acquisition by abrdn of the Wrap SIPP, Wrap Onshore Bond and TIP businesses from Phoenix Group
• an extension of the strategic asset management partnership until at least 2031
• the acquisition by Phoenix Group of the “Standard Life” brand.

We advised Aviva on the strategic divestment of a number of its businesses including the sales of Aviva Poland, Aviva France and Aviva Vietnam, a majority shareholding in Aviva Singapore, its shareholding in its Indonesian joint venture PT Astra Aviva Life and its stake in its Hong Kong joint venture, Blue.

We advised Intact Financial Corporation and RSA Group on the buy-in concluded between Pension Insurance Corporation and the Trustees of two schemes sponsored by RSA Group. The buy-in covered in total £6.5 billion of liabilities, covering 40,000 members, and is the largest ever bulk annuity transaction from pension schemes to insurer.

We advised Just Group on its issue of Tier 1 Contingent Convertible Notes, the first issuance of sustainability restricted tier 1 debt securities by a European insurer.

We have advised the UK Governments on a number of insurance-related schemes, including on schemes put in place to address the impact of the COVID-19 pandemic.  This work has brought together our insurance expertise and our long track record of advising Government departments, in particular dating back to the 2008 financial crisis.  Our work in this area has included advising:

• the Secretary of State for Levelling Up, Housing and Communities on the Government-backed professional indemnity insurance scheme for external wall system assessors
• the Department of Digital, Culture, Media & Sport on the UK Live Events Reinsurance Scheme put in place by the U.K. Government in response to the coronavirus pandemic
• the Department for Business, Energy & Industrial Strategy on the £10 billion Trade Credit Reinsurance Scheme put in place by U.K. Government in response to the coronavirus pandemic
• the Department of Digital, Culture, Media and Sport on the commercial, State aid and regulatory aspects of setting up the £500 million Film and TV Production Restart Scheme put in place by the UK Government in response to the coronavirus pandemic
• the Department of Health and Social Care on the insurance, regulatory, commercial and State aid aspects of the introduction of a new State backed indemnity schemes for NHS general practice.

We have advised a number of insurers, including Aviva and Zurich, in connection with potential business interruption claims arising as a result of the COVID-19 pandemic, including advice in connection with the land-mark financial markets test case brought by the FCA on behalf of thousands of business interruption insurance policyholders.