Legal & General (L&G) and Lifetri have announced plans to enter into a long-term strategic relationship, under which L&G will support Lifetri, as it expands to write further Dutch pension risk transfer (PRT) business for defined benefit arrangements.
The agreement is subject to regulatory review.
Currently the Netherlands is in the process of adopting major changes to its pension regime. The changes are expected to result in a substantial number of pension funds seeking insurance solutions in future years to support the transition of pensions arrangements into insurance-based, capital-backed guarantees for members.
Through this planned long-term strategic relationship between the two firms, Lifetri will benefit from L&G’s deep levels of expertise within global PRT markets and reinsurance capabilities, which includes over 35 years of experience in the UK market, as well as in the US, Canada and Europe.
The agreement also falls in line with plans by L&G to expand its PRT business beyond the UK and the US, the largest PRT markets. Upon completion, the agreement will provide expertise and reinsurance to Lifetri, thereby creating additional capacity in the Dutch PRT market.
Philippe Wits, CEO of Lifetri, said: “Lifetri has been an early mover, with an existing stable capital base, an established track-record of successes in recent years in the Dutch market, and strong brand recognition as a provider of innovative solutions. We look forward to benefitting from Legal & General’s global expertise in PRT markets. We are excited to continue to grow this relationship and with that be able to provide pension funds with sufficient capacity when they decide to opt for capital-backed insurance guarantees.”
Andrew Kail, CEO of Legal & General Retirement Institutional, commented: “Legal & General has been at the forefront of the global PRT market for a number of years now and the proposed pension reforms in The Netherlands present an exciting opportunity for us. I look forward to working with the Lifetri and Sixth Street teams to put in place a relationship that will help them provide solutions for Dutch pension schemes to secure the long-term benefits of their members.”
Following the announcement of this agreement, Fitch Ratings stated that it in its view this establishes Lifetri as a competitor to much larger incumbents such as Athora Netherlands, NN Group, and ASR.
Fitch claims that PRT demand will be stimulated by the upcoming pillar 2 pension reforms in the Netherlands, as these reforms will create a single, defined contribution-like system.
Additionally, the rating agency estimates total pension assets in Dutch company-sponsored pension funds to be around €300 billion, which is is currently the primary market for PRT solutions.
