It has been known for some time that Standard Life is short of capital to play on its own against American insurance. This article was published on 22nd of April 2026, a few days later on the 29th April, the PRA and BOE made an announcement.
My comments followed the next day
My article was based on a report by the BOE and PRA on funded reinsurance above
The rumour that Standard Life is being “helped” by CVC and Prudential was ill-timed!
The commercial reality is that American insurers can back British pension promises with inferior bonds to what the PRA demands for UK insurers. So the assets of our pension funds find their way being shipped on a boat to Bermuda as part of funded reinsurance of what the UK insurer is insuring!
CVC, an European private equity company has money to invest in Standard Life’s deals because it benefits with Standard Life while the investment is done by another American insurer.
The latest American insurer planning to wolf up our pensions is Prudential Financial according to the FT
A consortium led by CVC and Prudential Financial is in pole position to take a £1bn-plus stake in Standard Life’s pension-risk transfer business, as investors chase opportunities to back UK retirement plans.
Of course Standard Life (formally Phoenix) have bought Aegon for £2bn to be the platform provider for DC pensions both of which large books of GPPs , master trusts and platforms for own-occ DC schemes.
The idea is that this AMC driven business will be balanced by a capital heavy but less price sensitive DB pension buy-out business. But succeeding by following other may not work for Standard Life.
The new entity would invest in pension risk transfer deals, in which companies sell their retirement schemes to insurers which then take responsibility for meeting pension obligations to pay retirees their pensions. The insurers make a return on their investment if the gains on the pension scheme’s assets exceed the pensions they must pay retirees.
But here is the problem, firms investing in Britain , such as Rothesay are being cut out of the buy-out market because they do not get funding and give assets to American players.
The Bank of England and its regulatory arm PRA have issued a consultation paper on funded reinsurance because of the problems it has with assets invested by American insurers (primarily swapping pension assets for private credit). The BOE are also keen to have UK pensions invested in the UK and in part in assets that help the UK grow. This may not happen much with UK insurers insuring with UK bonds but it doesn’t happen at all when funded reinsurance ships the money across the pond.
The FT’s article makes it clear that Standard Life is keen to compete with other American insurers by becoming in part another one!
Large international asset managers have taken different paths to access the UK market. Brookfield and Apollo-backed insurer Athora announced direct acquisitions of UK insurers, while Legal & General struck an agreement with Blackstone worth up to $20bn to invest in US private credit.
The problem with Standard Life being capital-lite is that it is joining a long list of UK insurers either owned or in agreements with American private equity and the insurers that front the reinsurance. I am unhappy to see UK pensions being swapped for American private equity, so is the Bank of England and so should anyone in discussions with Standard Life.
Bought out by American private equity houses investing in American private credit is not what we meant for UK pensions. We should have second thoughts on such buy-outs.
Re-thinking should include the sponsor, trustees , members and their representatives. The Bank of England and its regulator are right to be consulting on this!
