HSBC unloads £4.2bn UK pensions business to Swiss Re


12 Jun, 2014

HSBC unloads £4.2bn UK pensions business to Swiss Re

HSBC Life (UK) Limited has entered into an agreement to sell its UK pensions business, including HSBC’s corporate and individual pensions policies and an associated annuities book to ReAssure Limited, part of the Swiss Re Group, for an undisclosed sum.

At the end of last year, the value of the underlying assets under management forming part of the transaction was about £4.2bn, of which about £4bn was managed by HSBC Global Asset Management (UK) Limited. Under a new contractual arrangement, HSBC Global Asset Management will continue to be the investment manager of these underlying assets.

The deal, which is subject to regulatory approvals and the court making an order sanctioning the scheme, is expected to be completed in the second half of 2015.

HSBC has also entered into a reinsurance agreement with ReAssure transferring certain economic risks and rewards of the business to ReAssure from 1 January 2014 until completion of the transaction, as part of the same deal.

Analysts at RBC Capital Markets have predicted the annuities market would shrink 90% following chancellor George Osborne’s announcement following the drastic March pensions reforms that “no one will have to buy an annuity”.

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