Insurance

Our insurance group is market-leading. We advise a large number of the major players in the UK insurance sector and have handled many of the major insurance sector transactions in recent years. The breadth of our practice encompasses the full range of work from multi-national to domestic, covering diverse aspects including mergers and acquisitions, financings, restructuring, risk transfer, investigations and regulatory advice.

We work closely with our asset management, pensions, disputes and tax colleagues to provide an integrated service across the entire waterfront of the sector.

We offer a truly comprehensive service to our insurance sector clients and advise on all types of transactions in the sector. 

Public and private M&A

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

  • Direct Line on its successful defence against a possible offer by Ageas SA/NV.
  • Allianz on its agreement with Sanlam to combine their operations across Africa (excluding South Africa).
  • Aviva on the acquisition of AIG’s UK protection business
  • 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, its 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.
  • Pollen Street Capital and its portfolio company Markerstudy on a number of transactions including the acquisitions of BGL Insurance and Clegg Gifford Holdings Limited and merger with personal lines broking business Atlanta.
  • Standard Life Aberdeen on the sale of its capital-intensive insurance business to Phoenix for a total consideration of £3.2 billion.
Reinsurance and other risk transfer arrangements

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:

  • A major insurer on multiple collateralised longevity swaps with UK and EU counterparties, including PIC, Aegon and NN.
  • Zurich Assurance on reinsurance arrangements with Pacific Life Re and The Prudential Insurance Company of America in respect of underlying pension derisking longevity swap arrangements.
  • Legal & General on multiple reinsurance arrangements in respect of its pension derisking activities.
  • 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.
Pension risk transfer solutions

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:

  • 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.
  • United Utilities on the partial buy-ins entered into with Legal & General by the trustees of two pension schemes sponsored by United Utilities
  • 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.
  • 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 via an insurance “conduit” directly to the reinsurance market.
Lloyd's of London

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:

  • the Lime Group in connection with the establishment of a new Lloyd’s Third Party Managing Agent.
  • 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

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.
Balance sheet optimisation

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.

Debt capital markets

We have a strong financing practice which regularly advises 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 the first issuances, by a UK insurer, of both a Green Bond comprising GBP250m fixed rate reset subordinated Tier 2 notes and a Sustainable Bond, comprising GBP 325m contingent convertible RT1 notes.
  • Athora on its EUR250,000,000 Tier 3 Term Loan Facility with a syndicate of banks. The term loans under the Facility constitute Tier 3 regulatory capital in Bermuda.
  • Bupa on its debt issuances of Tier 2 notes and contingent convertible RT1 notes under the Solvency II regime, including bespoke structuring and engagement with the PRA in light of the issuer’s status as an intermediate holding company without a listed holding company and the need to demonstrate availability of funds.
  • 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.
Equity capital markets

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.
Distribution

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

  • an insuretech client on its bespoke distribution arrangements with a mutual insurer under which the insurer will underwrite term life and critical illness insurance products developed and distributed by our client
  • 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.
Disputes, investigations and enquiries

We work closely with our Disputes and Investigations group to support insurance clients across a broad range of areas including regulatory investigations, competition enquiries, coverage disputes, policy interpretation issues, reinsurer insolvency, brokers’ liability and claims litigation. Our work in this area includes advising:

  • a client on the interpretation of trade credit reinsurance protection arrangements.
  • an insurer on a breach of warranty claim arising out of a business transfer agreement.
  • Aviva, Allianz, CNA, Liberty Mutual, MS Amlin and Zurich in relation to business interruption insurance claims brought by various English Premier League football clubs in respect of losses suffered during the COVID-19 pandemic, which is due to be heard in the English High Court.
  • a number of insurers in respect of other COVID-19 related business interruption insurance and reinsurance claims, including advice on the land-mark financial markets test case brought by the FCA and ongoing advice in relation to a number of complex reinsurance arbitrations.
  • a large insurer in relation to the impact of regulatory enforcement action on a senior executive’s remuneration package.
  • an insurance client in respect of the FCA’s thematic review of the sale of enhanced annuities and subsequent past business review and redress programme.
  • Standard Life Aberdeen on a contractual dispute with Lloyds Banking Group relating to agreements in respect of assets managed by SLA for Lloyds and customers of its insurance businesses.
  • Marsh in relation to a rare and high-value cross-border claim under an insurance policy covering a satellite against loss in the period before its launch.
  • a listed savings and investment company in relation to the recovery from insurers of significant costs and liabilities arising from an investigation by the Financial Conduct Authority.
  • Equitas/Resolute in its successful proceedings in the High Court regarding its pursuit of reinsurance claims against its reinsurer, R&Q Reinsurance.
Restructurings and demutualisations

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.
Regulatory advice

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.

Key experience

abrdn/ Phoenix Group strategic partnership

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

  • 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.
Aviva strategic divestments

We advised Aviva on the strategic divestment of a number of its businesses including the sales of Aviva Poland, Aviva France and Aviva Vietnam, its 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.

Legal & General derisking of Boots pension scheme

We advised Legal & General on its £4.8 billion full buy-in with the Boots Pension Scheme. This was the UK’s largest single transaction of its kind by premium size and, for Legal & General, the largest single transaction by number of members. It represented an innovative step forward in DB pension de-risking by providing a combined investment and insurance solution for the Scheme’s asset holdings, allowing the Scheme to achieve the certainty of a transaction whilst also maximising value by transferring its assets (or the associated sale proceeds) to Legal & General.

Allianz joint venture with Sanlam

We advised Allianz on its joint venture with Sanlam, the largest non-banking financial services company in Africa, to combine their current and future operations across Africa.

Just Group – issuance of sustainable bonds

We advised Just Group on the first issuances, by a UK insurer, of both a Green Bond comprising GBP250m fixed rate reset subordinated Tier 2 notes and a Sustainable Bond, comprising GBP 325m contingent convertible RT1 notes.

UK Government insurance schemes

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.
COVID-19 business interruption litigation

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 on the land-mark financial markets test case brought by the FCA and ongoing advice in relation to a number of complex reinsurance arbitrations.

key Contacts