Phoenix Group has sold its annuity business with liabilities of approximately £1.7 billion to Guardian Assurance.
The transaction is the second such transaction which the Phoenix Group has entered into with Guardian, which is owned by Cinven, following the sale of a £5 billion annuity business which completed in September 2013.
The current transaction involves an initial reinsurance, effective January 1, 2014, to be followed by a transfer of the annuity policies under Part VII of the Financial Services and Markets Act 2000.
It will remove a significant element of longer dated risk from three with-profits funds in Phoenix Group's primary life insurance company, Phoenix Life.
Hogan Lovells’ advised on the sale. The team advising Phoenix Group was led by London corporate partner Charles Rix, with assistance from senior associate Jonathan Russell and a cross-practice London team.
Rix said: "We are delighted to have been able to assist Phoenix Group with another significant transaction in their ongoing programme to protect and enhance the interests of policyholders in their closed with-profits funds."