Brookfield to Enter UK Pension Insurance Mkt as Companies Offload Pension Liabilities

Brookfield Wealth Solutions is entering the UK pension insurance market, it said on Monday, as the Canadian financial giant looks to tap into strong demand from companies to offload their pension scheme risks to insurers.

The move – subject to final regulatory approvals – would mark the arrival of a rare newly authorized entrant into the UK pension insurance market, and one armed with Brookfield’s sizeable financial firepower.

Brookfield Wealth Solutions, which was spun out of the sprawling Brookfield Corporation in 2021, expects to begin operations later this quarter under the Blumont Annuity UK brand, it said in a statement.

Bulk annuities are a form of insurance whereby a company’s pension plan offloads liabilities to an insurer.

Reuters reported in 2023 that Brookfield was considering entering the UK market and scanning the sector for potential deals to access bulk annuities.

British pension insurance deals totaled 45 billion pounds ($57.1 billion) in 2024, with 40 billion to 50 billion pounds in deals expected this year along with new entrants into the sector, adviser LCP said in a report last month.

LCP said on Monday that Brookfield would be the first new bulk annuity issuer to be authorized since Rothesay in 2007. It is the fourth entrant to the market in 18 months, after M&G, Royal London and Utmost, which were already authorized.

“We expect Blumont to have deep capacity, building on their track record in the U.S. and Canadian markets, with significant capital to deploy,” said Charlie Finch, partner at LCP.

Life insurers such as Aviva, Legal & General and Phoenix have expanded in recent years into the profitable but competitive market with companies eager to offload pension scheme risk from their balance sheets.

“With more than $140 billion in total assets, we look forward to serving the retirement needs of UK pensioners for the long term,” said Sachin Shah, CEO of Brookfield Wealth Solutions.

($1 = 0.7885 pounds)

(Reporting by Tommy Reggiori Wilkes; editing by Iain Withers and Jan Harvey)